Nigeria’s naira has enjoyed relative stability due to the China currency swap deal and peer-to-peer forex trade, though analysts warn the impact remains limited in daily market transactions.
Foreign exchange traders have attributed the recent stability of the naira to Nigeria’s currency swap agreement with China and the growing adoption of peer-to-peer (P2P) transactions.
The agreement, first signed in 2018 and renewed in December 2024 for $2 billion, allows Nigeria and China to settle trade directly in naira and yuan without relying on the U.S. dollar. Traders say this has reduced pressure on dollar demand, especially for businesses importing goods from China, Nigeria’s largest trading partner.
“The Chinese are now collecting naira for yuan, doing P2P,” said Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria (ABCON). “If a Nigerian is importing from China, all he needs is yuan. You don’t even need dollars now.”
Another trader, Yusuf, however, noted that while the swap helps, its effect on day-to-day market operations remains limited. “Many Nigerian traders still prefer USD because it is more widely accepted globally,” he explained.
Analysts believe the deal is easing pressure on the naira, but warn it cannot fully address Nigeria’s foreign exchange challenges since imports from China account for only about 20 percent of total imports.