09/11/2025
Naira Breakthrough: How China’s Acceptance of Nigeria’s Currency Could Reshape Trade, Investment, and Economic Stability👇❤️🇳🇬
The decision by China to accept the Nigerian Naira for bilateral trade is more than a symbolic diplomatic win, it is a seismic shift in Nigeria’s economic positioning, with implications that cut across trade, manufacturing, investment, and global finance.
The Lagos State chapter of the All Progressives Congress (APC) has hailed the move as a “landmark in economic diplomacy,” rightly pointing out that it reduces Nigeria’s chronic dependence on the U.S. dollar, a dependency that has historically fueled inflation, weakened the Naira, and created volatility in the foreign exchange market.
1. Reduced Dollar Dependence & Cheaper Imports:
By settling transactions in Naira, Nigerian businesses and importers will no longer have to chase scarce dollars to pay Chinese suppliers. This cuts transaction costs, reduces delays, and makes imports, particularly machinery, technology, and essential goods cheaper. Manufacturers who rely heavily on Chinese inputs stand to benefit significantly, potentially passing on cost savings to consumers.
2. Boost for Exports & Local Production:
China, as one of the world’s largest consumer markets, now becomes more accessible to Nigerian producers. Exporters can trade directly in Naira, which not only removes exchange rate barriers but also encourages local manufacturers to scale operations. This could open new channels for agro products, solid minerals, and value-added goods, positioning Nigeria as more than just an oil exporter.
3. Strengthening the Naira & Stabilising FX Markets:
Currency depreciation has long haunted Nigeria’s economy. Allowing the Naira to play a direct role in international trade reduces speculative pressure on the dollar, potentially stabilising the exchange rate. This builds confidence in the local currency and signals resilience in Nigeria’s financial architecture.
4. Investor Confidence & Global Positioning:
Oladejo’s assertion that this move “shatters the doomsday narrative” speaks to the confidence boost it provides. Foreign direct investors often assess currency stability before committing funds. A Naira that is internationally recognised in trade enhances Nigeria’s appeal, especially at a time when global markets are diversifying away from dollar dominance toward a multipolar financial order.
5. Challenges & Caution:
However, the policy is not a silver bullet. For Nigeria to fully benefit, structural bottlenecks such as low productivity, infrastructure deficits, and inconsistent export quality must be addressed. Without strengthening domestic production capacity, the policy risks becoming a one-sided advantage for imports rather than a balanced trade partnership.
6. Political & Symbolic Impact:
Beyond economics, the move underscores Nigeria’s growing influence under President Bola Tinubu’s administration. It frames Nigeria not just as a passive actor in global trade but as a nation capable of negotiating strategic financial breakthroughs. This strengthens PBAT's reformist narrative and offers the government a major win in the battle to restore economic credibility.
Summation:
China’s acceptance of the Naira is a diplomatic and economic victory with far-reaching consequences. It lowers costs for businesses, strengthens the local currency, boosts exports, and enhances Nigeria’s global standing. Yet, its ultimate success will depend on whether Nigeria can leverage this opportunity to expand production, diversify exports, and build a stronger, self-reliant economy.
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