China has expressed its support for Nigeria's request to expand a currency swap agreement and welcomed the nation's plan to issue panda bonds in the Chinese market. This announcement was made by Chinese Foreign Minister Wang Yi during his visit to Abuja, part of a four-nation African tour aimed at enhancing China's influence in the region.
Wang emphasized the success of financial cooperation between the two countries, stating, "We will favourably study and consider the issue" regarding Nigeria's desire to increase the currency swap line. He also affirmed China's backing for Nigeria's panda bonds, which are expected to generate revenue and support infrastructure development, particularly in railways.
Panda bonds, issued in Chinese Yuan by foreign entities in China, will help Nigeria diversify its funding sources and strengthen financial ties with China. Recently, the China Development Bank approved a loan of $254.76 million for Nigeria's Kano-Kaduna railway project, executed by China Civil Engineering Construction Corporation.
In a bid to boost trade and investment, China and Nigeria renewed their currency swap agreement, valued at 15 billion yuan (approximately $2 billion), valid for three years. This agreement allows for the use of local currencies in bilateral transactions, reducing dependence on the US dollar.
Wang Yi's visit follows high-level exchanges between the two nations, including Nigerian President Bola Tinubu's state visit to China in September 2024. The discussions are expected to operationalize agreements and explore further collaboration to benefit both countries.