Nigeria – China Currency Deal

The President Muhammadu Buhari and the Chinese President Xi Jinping, recently signed a bilateral currency agreement which was between the people’s Republic of China and Nigeria which also comes come with a lot of benefits to the two countries. China is a county that thrives on imports and production of cheap goods exported all over the world and also China accounts for over 70% of Nigeria’s total imports.

This deal, apart from its economic benefits, it also comes with billions of dollars in loans, infrastructural development, investment opportunities and job creation.

China once again has successfully won one of the biggest African market (Nigeria), no wonder it quickly made Nigeria its clearing house for Yuan denominated transaction for the whole of Africa. This has a lot of economic significance to Nigeria and Africa as a whole. It can simply be interpreted as Nigeria being the financial clearing house to any Yuan transaction in Africa.

China is currently showing the world that it has everything it takes to become the world power. This has always been their challenge with the United States of America who feels threatened by this. So listed below are the biggest winners and losers for this new deal.


Nigeria – China Currency Deal – The biggest winner

1. China : On the long run, the Yuan will become one of the most traded currency in the world overtaking the dollar. This is one of Chinas biggest goal. It will also pave way for more investment opportunities for China in Nigeria.

yuan naira

2. Nigeria : This will help foster strong economic and infrastructural growth to Nigeria, It will create more jobs, It will allow businessmen to easily carry out transactions between them and their counterparts in China. It will provide easy access to loans for Nigeria and Nigerian businesses from China.
3. Importers :- 70% of our imports are currently from China, with the new deal, this means our importers won’t have to first convert their money to dollar before buying in Yuan. Importers will have to deal directly with their buyers in Yuan. For example

If an importer is to buy a good from China worth 6467 Yuan. He will first need to change his naira to dollar. (N320,000=$1,000 ) then change the $1,000 dollars to Yuan which is 6467.00 . But if he decides to change to Naira directly then 1 Yuan is N30.80 naira x 6467 = 199,209.24 .

In the first Calculation he will be spending 320,000 – 199,204.24 = 120,796. In the first process , the importer will lose 120,796 just because of the currency conversion. But with this new deal importers will have a lot to save and we should also expect a reduction in the price of goods exported from China

Bureau De Change/Banks – it means more people will be changing naira to Yuan as compared to naira to dollar.

Sellers of China goods – There will be more people shipping and buying from China as compared to before, therefore it means there will be more money to be made. Companies can easily import raw materials to produce from China.

China Investors: This will provide easy access for China investors to easily penetrate the Nigerian market.

Dangote: This deal also paved way for Nigeria’s billionaire and the richest man in Africa Aliko Dangote, as he will be getting a wooping sun of 2 billion dollars for the construction of two cement plants.

Nigeria – China Currency Deal – The biggest losers

USA – The US is gradually losing its international market share to China, this is because China is gradually becoming more daring and eating deep into their market. China has succeeded in eating deep into their share of the market as a result of several deals with the United Kingdom, Russia, India, and many other countries.
IMF – The international monetary fund (IMF) has been wooing Nigeria to come take its loan which comes with several terms and conditions which some economist have said is not in the best interest of Nigeria but rather will make our economy worse than it is in the long run. Some also claimed most of the terms and conditions favours the western Countries more than it favours us.
The Opposition: The Nigerian opposition party has faulted so many claims in the recent deal with China, but China is bent to continue with the deal.



Source : www.businessmopol.com/nigeria-china-currency-deal-the-biggest-losers-and-winners

I pray this will boost our country

God bless Nigeria God bless PMB God bless us all (Amen)

k

This deal was driven by rising wages in China, and the need to reduce their exposure to increasingly protectionist western markets as the Chinese transition to high value manufacturing, and automation erodes their cost advantage. Anyways, once the haircuts ( ) are taken, it would be interesting to know how much of the said $6 billion actually goes into the required work and how much ends up in the BVI.
In any case, it is in Chinese interests to get a firm foothold in Nigeria's emerging market before it gets too crowded.

The unbalance of trade problem is definitely real with this deal.

He go better we shall surely reach there, God bless Nigeria

allytinted:
God bless Nigeria
God bless PMB
God bless us all (Amen)

What is with the God bless b.s?

As long as it gets easier and cheaper to import from China, expect more job losses as industries close shop.

Na how e no go affect me n oda lay pple negatively na im I de after. If I go buy China product thinking its sumtin else eh? Buhari buhari buhari!!! How many times did I mention ur name?

The man they call dullard happens to be more brilliant than their ancestors combined. Awon ode

.The deal will surely bring down the price of things in the market.The price of things(esp food)in the market is not currently smiling at any body at all.can you imagine that Golden penny spaghetti is now #180 from #120 all because of high dollar.

Good.

R

When is the policy going to start i'm tired of all these noises

Make una no forget say Chincko people are dubious

H

This deal will soften effect on dollar and at the same time we shouldnt be over dependent on this deal

i so much believe in buhari even with the harsh economic situation. i cant just explain the love for this man

Anyone following global geopolitics.. would know.. we easily could be in a bad situation... Ask Brazil, Zimbabwe and South Africa what their leaders are currently going through for this type of deals..
Just saying

Shibobo..

Educative Summary!!!
Bravo@ Op

I believe nigeria will be great again

This deal was driven by rising wages in China, and the need to reduce their exposure to increasingly protectionist western markets as the Chinese transition to high value manufacturing, and automation erodes their cost advantage. Anyways, once the haircuts ( grin) are taken, it would be interesting to know how much of the said $6 billion actually goes into the required work and how much ends up in the BVI.
In any case, it is in Chinese interests to get a firm foothold in Nigeria's emerging market before it gets too crowded.


BVI.

Dollyak:
This deal was driven by rising wages in China, and the need to reduce their exposure to increasingly protectionist western markets as the Chinese transition to high value manufacturing, and automation erodes their cost advantage. Anyways, once the haircuts ( ) are taken, it would be interesting to know how much of the said $6 billion actually goes into the required work and how much ends up in the BVI.
In any case, it is in Chinese interests to get a firm foothold in Nigeria's emerging market before it gets too crowded.

This is a good deal in the current circumstance we are in....


My only issue is that, we will get lazy as always and depend on imports from China to feed us therefore going backward technologically and economically in the long run when population increases more.


This should be seen as medium term fixes to or our problem, while in the long run, there should be a backbone for our industrialization and technological enhancement

Nigeria has sold it's soul to China through Mallam Buhari.

Drclassic:
I pray this will boost our country

I hope and pray for the best.

Hope the common man will benefit from this?

How about the local manufacturers Are they winner or loser?

Very very clumsy write up filled with assumptions and fallacious elements!.....before u brand me a wailer....Nope am not a full time wailer but Nigeria-china..I will wail!

Here is my angle of argument



#1--Yuan is nowhere near the dollar and should never b compared to it...d distance is jst too far!

#2--Nigeria major export which is oil still sell with dollar

#3--No ntion can run away from dollar, even russia reserve is in dollars!

#4---why is Dangote getting his loan in dollars and not Yuan

#5--70% of import from china is jst a number, u mean spoons, ceramics, fake electronics nd co Our exchange of oil with netherlands beat the price of our exchange with china in a year!

#6--Even if they try to twist their way out of dollar, what of gold??

#7---If china keep filling our market with their goods...what happens to our own local industry

#8--China Yuan is one of the unstable currency of d world!


Am done wailing, sm1 shld hand me tissue paper to clean up......God jst keep using dis nation to show isrealites that 40yrs in d wilderness is a generous punishment

A good development. The rate at which the naira is lagging against the dollar with slim/no possibility of catching up at least to a reasonable rate needs a review. Not forgetting the fact the US contributes to a large extent the current stress in international oil market (nigeria major income source) plus pulling out of oil trade with Nigeria which we are still suffering, sending us used/fake equipment to fight boko haram.

A better and careful implementation of this may start the revolution against the dollar.

But how can the US respond? Can we survive her response? I believe US cant help, can she ?