China to Enhance Financial Ties with Nigeria Through Expanded Currency Swap and Support for Panda Bonds

China has pledged to bolster its financial partnership with Nigeria by increasing the scope of their existing currency swap agreement and supporting Nigeria’s issuance of Panda Bonds. This move aims to enhance trade and infrastructure development between the two nations.

The announcement was made by China’s Foreign Minister, Wang Yi, during a press briefing at the Presidential Villa in Abuja on Thursday. Wang Yi had earlier met with President Bola Tinubu, where they discussed a range of initiatives aimed at deepening financial collaboration.

“The currency swap agreement reflects the progress we’ve made in our financial cooperation, and we are committed to continuing this momentum,” Wang Yi stated.

Regarding Nigeria’s request for an expanded currency swap line, Wang Yi indicated China’s favorable outlook. “We are optimistic about increasing the currency swap line, as our cooperation in various areas, especially finance, continues to grow.”

In addition, Wang Yi voiced China’s backing for Nigeria’s plan to issue Panda Bonds, which are renminbi-denominated debt instruments issued by non-Chinese entities within China’s domestic bond market. These bonds would provide Nigeria with reliable revenue streams, with Chinese financial institutions ensuring the security of the investments.

“We welcome Nigeria’s decision to issue Panda bonds in China, as we have full confidence in the country’s credibility,” Wang Yi remarked. “By doing so, Nigeria will benefit from solid revenue and assured safety through our financial backing.”

China also reaffirmed its ongoing role in Nigeria’s infrastructure development, particularly in the modernization of the country’s railway system. Wang Yi pointed to the recent completion of the third phase of Nigeria’s railway project, funded by Chinese banks, as a testament to their collaborative efforts.

“Only a few days ago, Chinese banks supported the completion of phase three of the railway modernization project, which is now finished. Projects such as the Kano-Kaduna railway are examples of our commitment to advancing Nigeria’s infrastructure,” Wang Yi added.

Nigeria’s Foreign Affairs Minister, Yusuf Tuggar, further emphasized the significance of the partnership, particularly in terms of military collaboration. He highlighted Nigeria’s desire to work with China to localize military equipment production, aiming to streamline procurement processes and reduce reliance on complex international regulations.

“This partnership will allow us to eliminate delays and navigate around the challenges posed by international regulations, marking a critical step toward self-reliance in meeting our security needs,” Tuggar explained.

Both countries reiterated their shared vision for regional stability, with Nigeria reaffirming its leadership role in West Africa. Tuggar noted that Nigeria, grounded in its constitution, will continue to rely on strategic partnerships like China’s to address challenges such as external interference.

These developments build on the 2019 Memorandum of Understanding between Nigeria and China, which strengthened military and strategic cooperation. The expansion of the currency swap and the support for Panda Bonds are expected to provide Nigeria with substantial financial relief and foster mutual growth.