After a week visit to the People’s Republic of China, the Nigerian President, Muhammadu Buhari has taken a step further towards his promises on delivering the needs of the people. This is based on a 2 billion dollar loan rendered by the Chinese as well as viable investment to be made in Nigeria by its government through development partnerships. The Chinese President, Xi Jinping and President Muhammadu Buhari also agreed to strengthen the military engagement that exists between both countries.
Recently, there has been a high rise of the Naira against the dollar and analysts called for the devaluation of the Naira as a remedy to this challenge. In a partnership signed in Beijing, China during the week, the major banks of the two countries, the Central Bank of Nigeria and the Industrial and Commercial Bank of China Limited signed a swap deal to promote Yuan transactions with the Naira.
This is expected to further promote trade deals between them and also create a better bi- lateral engagements between Nigeria and China. The Director-General, African Affairs department while speaking on this deal noted that of China’s foreign ministry Lin Songtian noted that “Renminbi is free to flow among different banks in Nigeria and the renminbi has been included in the foreign exchange reserves of Nigeria”.
Despite the positive tune this action has brought to many as a move towards development, some analysts have criticized the move. They believe that the Chinese with this deal will have more opportunities to invest in the country which on the long run may be for their benefit because it will bring about more skilled Chinese labour in our country thereby cutting jobs for others. Critics point out that this will mean that the Chinese government will be responsible for the infrastructure of viable projects in Nigeria thereby strengthening its labour.
They also point out that the future revenue of Nigeria will be affected by debts and much of the taxes paid by citizens will be used in paying back such debt because the partnership is a type that ensures that instead of giving out the loan to the country, it will made effective through offering Nigeria’s needs by the Chinese. However, this move is believed to have a positive effect on different sectors of the Nigerian Economy as it will ensure also that the dependence of the strength of the Naira on the dollar which has called for the West asking for devaluation is not present. Instead, the Reminbi (also known as Yuan) will take its place.
The agreement also will provide a 15 million dollar agricultural assistance to Nigeria to set up demonstration farms in different parts of the country. Some believe the partnership is a good move and is from the view that Nigeria does most of its transactions with China and it sounds out of place paying with the dollar in such a situation. Thus, the Chinese will also pay in Yuan when they but crude oil from the Nigerian government thus strengthening the Naira. In between the controversies and the take of people on this, only time will tell where the partnership will take us.