China has pledged support for Nigeria’s request to increase its currency swap line and endorsed plans for Nigeria to issue Panda bonds, marking a significant boost in financial cooperation between the two nations.
Chinese Foreign Affairs Minister Wang Yi made this announcement on Thursday during a meeting with President Bola Tinubu at the Presidential Villa, Abuja. Wang noted that these measures would enhance Nigeria’s revenue, ensure financial stability, and deepen bilateral ties.
“The currency swap agreement shows how well we have carried out our financial cooperation and sustained its momentum. Regarding Nigeria’s wish to increase the currency swap line, we will favourably study and consider the issue,” Wang Yi stated.
Currency Swap Agreement
The currency swap deal, first signed in 2018, allows trade between Nigeria and China in their local currencies—naira and yuan—bypassing the need for dollars. If expanded, the agreement could ease liquidity challenges and promote trade.
Panda Bond Issuance
China also expressed confidence in Nigeria’s financial credibility, endorsing its plans to issue Panda bonds—renminbi-denominated bonds issued by non-Chinese entities in China’s domestic market.
“We welcome Nigeria to issue Panda bonds in China. By issuing Panda bonds, Nigeria will gain good revenue, and safety is guaranteed through financial support,” Wang Yi said.
This initiative offers Nigeria access to China’s vast investor base, creating opportunities to address budget deficits and finance critical infrastructure projects.
Railway Infrastructure Commitment
Wang Yi further highlighted China’s commitment to Nigeria’s infrastructure development, particularly in the railway sector.
“Chinese banks recently funded the construction of phase three of the railway modernisation project. This underscores our comprehensive and growing cooperation,” he added.
The railway modernisation initiative, which includes the Kano-Kaduna railway, has received substantial support from the China Development Bank, aligning with Nigeria’s push to develop critical infrastructure and spur economic growth.
Strengthened Bilateral Relations
These developments signal a deepening of Nigeria-China relations, with both nations working to strengthen financial, infrastructural, and trade ties for mutual benefit.
