“China is today Nigeria’s largest project contractor and second largest trading partner and a major source of investments…”
– As CBN plans 2nd yuan auction
Aidoghie Paulinus, Abuja
The Chinese government has renewed its commitment to deepen investment in the country. The assurance by the Chinese government to expand its investments in the critical areas of the nation’s economy, according to the Chinese Ambassador to Nigeria, Dr Zhou Pingjian, was to boost the increasing bilateral ties between China and Nigeria. Pingjian said China would step up its cooperation with Nigeria in agriculture, manufacturing, industrial capacity and investment, including infrastructure, energy, culture, people-to-people exchanges and other areas.
The Chinese envoy also urged Nigerians to take advantage of the forthcoming Forum on China-Africa Cooperation (FOCAC) holding in Beijing, China, in September, 2018 to improve their relations
The FOCAC summit, would yield almost $100 billion for African countries, an amount to be made available by the host country which Nigeria and other African countries will draw resources to improve infrastructure and enhance trade.
Speaking during the China-Nigeria Production Capacity and Investment Cooperation Forum 2018 held at the weekend in Abuja, Pingjian said China had huge infrastructure development investment in Nigeria.
“In Nigeria, the Abuja-Kaduna railway, Africa’s modern railway with the Chinese technology and standards, was commissioned in July 2016. The Abuja rail mass transit project, the first urban railway in West Africa, was commissioned in July 2018. The Lagos-Ibadan railway broke ground in March 2017.
“The construction of the Lekki Deep Water Port, the largest port in West Africa, and the Zungeru hydropower station, the largest hydropower station in Nigeria are well under way.
“In the past year alone, the two sides have concluded concessionary financial arrangements to support five more major projects in Nigeria. Tens of thousands of jobs have been created for Nigerians by projects contracted by Chinese enterprises or partly financed by the Chinese side. The cooperation between China and Africa under the Belt and Road Initiative will generate more resources and means, expand the market and space for African development, and broaden its development prospects,” Pingjian noted.
On his part, the Chairman, House of Representatives Committee on Nigeria-China Relations, Yusuf Buba Yakubu, said the forty-seven years of bilateral relations between China and Nigeria have resulted to tangible benefits for both countries.
Meanwhile, the Central Bank of Nigeria, (CBN), Friday called on traders to submit bids for the Chinese yuan, in its second auction of the currency after it agreed a swap with the People’s Bank of China in June.
The apex bank had in June of 2018 signed a $2.5 billion three-year currency swap deal with Beijing to facilitate trade between the two countries and cut reliance on the US dollar.
In the first auction held about a fortnight ago, the CBN sold 69.86 million yuan ($10.16 million) at a range of 49-51 naira.
Dollar liquidity has been shrinking as a result of capital reversals after the U.S. central bank started to raise interest rates this year.
Concerns over political risk in the run-up to next year’s presidential election, where incumbent Muhammadu Buhari will seek re-election, and falling yields on government treasuries have deterred inflows.
The auction is part of efforts to encourage the use of an alternative trading currency to the U.S. dollar especially as Nigeria imports heavily from China.
Bids at the auction must be backed by customer invoices, traders said, with the exchange rate determined via a book building process.
The bank also plans to auction the U.S. currency on Friday, traders said.
The naira, which is traded over the telephone, has been quoted at a range of 362 to 363 per dollar. It could ease to 364 this week owing to tight liquidity on the interbank market, traders say.
The unit is quoted at around 306 per dollar on the official market, supported by central bank’s regular intervention.
“China is today Nigeria’s largest project contractor and second largest trading partner and a major source of investments.
“As a direct benefit of the FOCAC outcome, Nigeria’s infrastructural gaps are receiving significant attention with the overhaul of the nation’s infrastructure and agriculture modernization programme.
“As we approach the September FOCAC summit, it is my belief that outcomes will be directed at redoubling current achievements and expand Nigeria’s window for capacity building programme in China especially in the area of SMEs development.
“Our duties as policy makers are to ensure that effective laws are in place to protect foreign investments and consolidate on the existing relationship of both nations,” Yakubu said.