Nigeria excludes 41 items from China currency swap deal

The Nigerian naira. FILE | NATION MEDIA GROUP

Nigeria has banned 41 items from the goods to be imported from China under the currency swap deal that takes effect next month.


The Central Bank of Nigeria (CBN) said the Nigeria-China currency swap deal would not cover certain items because they were not eligible for foreign exchange.


CBN on June 23, 2015, imposed a ban on accessing foreign exchange on the official market for the importation of some goods and services.


The aim was to encourage local production of those items, conserve foreign reserves and improve employment.


The items banned include rice, cement, poultry, tinned fish, furniture, toothpicks, kitchen utensils, table wares, textiles, clothes, tomato pastes, soap and cosmetics.


Security and razor nails

Also banned were private jets, roofing sheets, metal boxes, wire rods, steel nails, security and razor nails, ceramic tiles, glassware, cellophane, plastic and rubber products.

CBN last year signed a bilateral currency swap agreement with China, worth about $2.7 billion (N720 billion).


According to CBN, the decision would ensure the protection of the local companies and shield Nigeria from being a dumping ground for Chinese goods.


CBN’s acting director, corporate communications Isaac Okorafor, said: “This deal will open further the export market to China.’’


“The first thing is that we are going to focus on exports to China. Also, remember that we already export cassava products to China as well as leather, hides and skin amongst others.”

Set up factories

Mr Okorafor further said that with the Nigeria-China currency swap deal, the Naira was expected to appreciate against the US dollar as the demand for the American currency eases.


“China accounts for a quarter or more of imports into Nigeria.


“The exchange of currencies between the Nigerian Central Bank and the Chinese Central Bank will make it easier for our entrepreneurs to have direct access to foreign exchange in Renminbi, ” Mr Okorafor explained.



He noted that one of the advantages of the deal was that it would encourage Chinese companies to set up factories in Nigeria, which would lead to job creation.


“Chinese investors are interested in setting up shop here. And that is because if they produce here, it will be better for them,” he said.


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