Falana accuses IMF of frustrating Nigerian-China currency swap deal

Ogunsakin Mustapha
4 Min Read
Femi Falana SAN

Human rights and anti-corruption lawyer, Femi Falana SAN has accused the International Monetary Fund(IMF), World Bank and the Central Bank of Nigeria(CBN) of colluding to sabotage the currency swap agreement between China and Nigeria, thereby frustrating the Nigerian business community from transacting business with China in local currency.

Falana therefore urges the Nigerian business community who have business interests with China to insist on conducting their transactions in naira.

Falana said: “About five years ago, the Federal Government of Nigeria and China entered into a currency exchange agreement. The transaction, which was valued at Renminbi (RMB) 16 billion or N720 billion, was aimed at providing adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses, thereby, reducing difficulties encountered in the search for the United States Dollar. The swap was also designed to improve the speed, convenience, and volume of transactions between the two countries;

But the International Monetary Fund and the World Bank, which superintend the Central Bank of Nigeria, have colluded with the Central Bank of Nigeria to frustrate the currency swap. The purpose of the economic sabotage is to promote the dominance of the United States Dollar in Nigeria. Hence, the federal government, state governments, and the business community have been prevented from transacting business in Naira and Yuan. Thus, by compelling Nigerians to pay dollars for goods imported from China, the Central Bank has continued to promote the unwarranted dollarisation of the Nigerian economy;

I was recently compelled to exercise my right under the Freedom of Information Act by requesting the Central Bank to furnish me with information on the status of the currency swap agreement between Nigeria and China. In its reply to my letter, the Central Bank confirmed that the  currency swap agreement will not be due for renewal until 2024. In spite of the confirmation of the currency swap, the Central Bank has not allowed Nigerians to transact business in China by paying Naira.  However, since the currency swap is valid and subsisting”.

The CBN reply to Falana’s inquiry signed by Abubakar Bashir Albasu on behalf of the secretary of the board showed that the currency swap agreement between CBN and People’s Bank of China was signed in May 2018 and is renewable every three years. The aim is to reduce the cost of transactions in multiple currencies, reduce pressure on the country’s external reserves, and ensure foreign exchange stability.

The letter further stated: “The swap commenced in July 2018 and expired in April 2021 and was subsequently renewed. The sum of CNY15 billion was the overdraft amount usable within the year. Since its renewal, CNY9 billion has been drawn, CNY6 billion utilized, and CNY3 billion outstanding, and out of the CNY6 billion utilized, CNY5.10 billion had been repaid while the sum of CNY 2.10 has not been utilized, leaving the sum of CNY900 million yet to be repaid. Furthermore, the next renewal is expected to take place in 2024”.

Falana therefore called on the Nigerian business community to insist on transacting business in Naira, including payment for goods imported from China.

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