In a major shift in Nigeria’s foreign exchange market, Chinese traders are increasingly accepting naira instead of U.S. dollars for transactions, forex dealers have confirmed.
The development stems from the Nigeria–China currency swap agreement, first signed in 2018 and renewed in December 2024. The deal, currently valued at $2 billion, allows direct trade in naira and yuan, bypassing the dollar as an intermediary.
Aminu Gwadebe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), said the practice is gaining traction, particularly through peer-to-peer (P2P) forex platforms that link traders directly. According to him, the change has improved market liquidity and reduced pressure on the naira.
“There is no reason to convert naira to dollars before exchanging for yuan,” Gwadebe noted. “Chinese traders are now willing to accept naira, and this is a positive sign for the currency.”
Government officials are touting the development as proof that recent economic reforms are restoring faith in the local currency. Presidential Adviser Bayo Onanuga described the trend as “a validation of Tinubu’s reforms,” adding that Nigerians can now even use naira cards on Chinese e-commerce platforms.
Still, some traders caution that the shift is limited in scope. While yuan transactions are growing, the U.S. dollar remains dominant in most international and domestic exchanges. Street-level liquidity for yuan is also still thin, making dollars the preferred currency in many cases.
Analysts say the acceptance of naira in China-linked trade is a step toward dedollarization and could help stabilize the currency if sustained. But they also warn that without deeper yuan availability in Nigeria’s financial system, the dollar will continue to hold sway in the wider economy.
