Nigerian government has agreed to include China yuan currency in its foreign reserves as Beijing seeks closer ties and greater political and economic heft on the resource rich continent.
At a signing ceremony in Beijing, Presidents Xi Jinping and Muhammadu Buhari presided over the signing of six agreements. They covered industrial activity, aviation and infrastructure investment cooperation between the world second largest economy and Africa most populous nation, which has struggled in the face of plunging oil prices and an $11 billion budget deficit this year.
The Nigerian central bank and the Industrial and Commercial Bank of China signed an agreement allowing transactions to be conducted in yuan and for the currency to be included in Nigeria foreign exchange reserves.
“If there is demand from Nigeria, China is ready to further conduct financial cooperation,” Lin Songtian, the foreign ministry director-general of African affairs, told reporters after the ceremony.
Nigeria is the first African country to use China currency in its reserves, he said. China has poured investment into the continent as it has sought raw materials to fuel its booming economy. It became Africa largest trading partner in 2009.
Also in a related development China has offered Nigeria a loan worth $6bn to fund infrastructure projects. “It is a credit that is on the table as soon as we identify the projects,” the Minister of Foreign Affairs, Geoffrey Onyeama, told reporters who travelled with President Muhammadu Buhari to China.
“It won’t need an agreement to be signed; it is just to identify the projects and we will access it,” he said. Also, the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, said in a statement that the Chinese President, Xi Jinping, offered $15m agricultural assistance to Nigeria for the establishment of 50 demonstration farms across the country.
The offer was in response to Buhari vow to make Nigeria self-sufficient in food production. The offer, according to Shehu, was made during talks between Buhari delegation and high-ranking Chinese government officials led by Jinping.
During the talks, China and Nigeria also agreed to strengthen military and civil service exchanges as part of a larger capacity building engagement.
In line with this, China offered to raise its scholarship awards to Nigerian students from about 100 to 700 annually, while 1,000 other Nigerians would be given vocational and technical training by China annually.