China Offers $6bn Infrastructure To Nigeria

Nigeria has received a loan from China to fund infrastructure projects. Mr. Geoffrey Onyeama said this yesterday in Beijing, the Chinese capital.

“It is a credit that is on the table as soon as we identify the projects”, he told reporters travelling with President Muhammadu Buhari to China.

“It won’t need an agreement to be signed; it is just to identify the projects and we access it”, he said.

According to Reuters, the confirmation by Onyeama coincided with an agreement reached between Nigeria and China yesterday on a currency swap deal, as it looks for ways to shore up the naiira and fund a record budget deficit, possibly by using yuan-denominated bonds in China.

The agreement was reached between President Buhari and Chinese President Xi Jinping.

The Finance Minister, Mrs. Kemi Adeosun, had said on Saturday that Nigeria was looking at Chinese panda bonds – yuan-dominated bond sold by overseas entities on the mainland – adding that they would be cheaper than Eurobonds.

According to Reuters, during Buhari’s visit to Beijing, the Industrial and Commercial Bank of China Ltd (ICBC), the world’s biggest lender, and Nigeria’s central bank signed a deal on yuan transactions.

“It means that the renminbi (yuan) is free to flow among different banks in Nigeria, and the renminbi has been included in the foreign exchange reserves of Nigeria”, Lin Songtian, Director General of the African Affairs Department of China’s foreign ministry, told reporters.

The Nigerian Central Bank revealed its plans to diversify its foreign exchange reserves away from the dollar by switching a stockpile into yuan five years ago.

Lin said a framework on currency swaps has been agreed with Nigeria, making it easier to settle trade deals in yuan. China has signed currency swap deals with countries ranging from Kazakhstan to Argentina as it promotes wider use of its yuan.