I had reasons to pick up a friend from the Murtala Mohammed International Airport Ikeja, Lagos. She had just returned from Guangzhou, China with her import of jewelleries which she disposes of on wholesale basis. While on our way back home after passing through a lengthy and tiring custom clearing process, I requested for samples of the imitation jewelleries so I could help her market some. Behold what I saw were wristwatches, necklaces and ear rings that are sold  between N500 to N1,000 in the market. I then asked why she had to travel all the way to purchase these items and she responded thus; “it’s cheaper and more profiting to import than to produce them in Nigeria regardless of the flight fare, hotel bills, stress and import duty paid on the goods because cost of production in Nigeria is very high, especially when power alone constitute about 40% of the cost of production.” 

Dorkhaz Sek
Dorkhaz Sek Innate



Though I am neither an economist nor a finance expert, I understand logic and arithmetic. Just like every other Nigerian, I have wants and needs and most of these are satisfied by products that are NOT made-in-Nigeria. This is not because we are unpatriotic, but because most of the country’s manufacturing industries lack the capacity to produce even the most substandard consumables at cheaper rates than the imported ones. The glory days of “Aba made” products faded into oblivion mainly due to unfavourable manufacturing environment that is made worse by power.

Within the past one year, the prices of all consumables that constitute these wants and needs have been witnessing colossal increase, consistently due to the merciless slump of my country’s legal tender against the US Dollar. In fact, I just realize that our lives are avoidably dollarized because successive managers of our economy have failed. 

Being an import dependent economy, with about 80% of the goods coming from China, I cannot comprehend why we have to continue buying from China using dollars even when the Chinese Government is offering Nigeria a currency swap deal that will see Nigeria convert a portion of its foreign reserve from US Dollar to Chinese renminbi (also known as Yuan) to make “our” imported goods cheaper.

For emphasis, currency swap is an arrangement between two friendly countries to trade in their own local currencies, paying for import and export trade at pre-determined rates of exchange without the use of a third currency like the United States dollar. 

Since the financial crisis of 2008, central banks around the world have entered into bilateral currency swap agreements with one another. These agreements allow a central bank in one country to exchange currency, usually its domestic currency, for a certain amount of foreign currency. The recipient central bank can then lend this foreign currency to its domestic banks who will in turn give out to prospective importers.

Since 2008, China, has signed swap deals with nearly 30 countries. For example, South Korea, one of China’s largest trading partners, signed a swap agreement with China in December 2008 and has renewed and expanded the swap amount many times. In June 2015, the People’s Bank of China and Bank Negara, Malaysia signed an agreement to renew their currency swap arrangement for a further term of three years with the size maintained at 180 billion yuan/90 billion ringgit. The original arrangement was established in 2009 and first renewed in 2012. Africa has now joined the bandwagon. In April 2015, the South African Reserve Bank announced it had signed a three-year bilateral swap agreement with the People’s Bank of China for the exchange of local currencies of up to R57 billion.

According to a publication by the People’s Bank of China, these swap agreements were intended basically to “facilitate bilateral trade and investment between them.”

In practice, these countries are doing better without the US Dollar interfering in every aspect of their lives. 

Why are we an exception? How is this dollarization affecting the Nigerian masses? The “de-dollarization” and subsequent “Yuanization” of our lives has to continue for now pending when we put our house in order. Hence, this was wgy the news of a proposed currency swap between China and Nigeria was welcomed by Nigerians, especially, members of the economic community. 

Therefore, I smelled a rat when after PMB’s visit to China in April 2016, our competent minister for finance, Mrs. Kemi Adeosun  and the  Central Bank of Nigeria Governor, Mr. Godwin Emefiele publically announced the government’s plan for a currency swap deal with China and shamelessly recanted later; I suspect blackmail when USA that stopped buying our crude oil since 2014 suddenly started buying and has overtaken India. Whose interest will “Yuanisation” puncture and whose will it serve?

 Follow us on Twitter: @youthsdigest