Some Financial Economists have expressed great concerns on the minor influence that the Nigeria-China currency swap had on the country’s economy, three years after.
The experts told newsmen in Lagos on Friday that the volume of currency import so far traded, had not been significant, though a few swaps took place.
The pact which marked three years of implementation in April, was signed on April 27, 2018, to ease demand pressure on the country’s supply of foreign exchange.
The Chief Executive Officer of Arvo Finance, Mr. Ayotunde Bally, said that the pact had not been fully utilized due to a decrease in the drawdown of the money input of the Chinese Yuan to the Central Bank of Nigeria.
“This pact which was aimed at creating a harmonious relationship between the two countries has not been utilized as it ought to be.
“Statistics has it that Nigeria- China bilateral trade which was around two billion dollars in 2002 is within the space of about 14 billion dollars in contemporary years.
“And yet, we cannot boast of about three billion dollars Yuan being utilized in such market transaction,’’ he said.
According to Bally, that has clearly displayed the negligence of the pact by most business importers.
He said the poor state of the pact was due to ignorance and the benefits of the pact to those who utilize it.
“Also, the deliberate avoidance of the pact by those who believe transactions are easier with dollars or some other methods like Bureau De Change among others.
He advocated massive sensitization on the usefulness of the pact to both the business individuals and the country at large.
Mr. Johnson Chukwu, Founder of Cowry Asset Management Limited, also said that the pact recorded minimal benefit to the economy.
According to him, China accounts for more than 25 per cent of our import; so we should not have a currency swap that delays immediate payments of our foreign reserves.
Also, Prof. Ndubisi Nwokoma, Director, Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos, said that the swap deal had positive impact on the naira exchange rate with major currencies.
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“The Nigeria-China currency swap deal, according to reports, has some positive impact on the stability of the naira exchange rate with major currencies.
“But, its effect is limited by the volume of trade between Nigeria and China.
“With decline in global productivity occasioned by the COVID-19 pandemic and other factors, the effect appears not to have achieved the originally intended objectives.
“Nigeria has been bedeviled by other economic challenges. The current sorry state of the country’s exchange rate is quite instructive in this regard,” Nwokoma said.
