The National Association of Nigerian Traders (NANTS) has canvassed a four-point strategic measure for immediate adoption by key stakeholders in the Nigerian economy in order to make the recent Nigeria-China currency swap deal an economic blunder for Nigeria.
The association through a statement issued by its National President, Barrister Ken Ukaoha, at the weekend noted that the final signing the deal worth $2.5billion by the Federal Government of Nigeria, is a significant exhibition of wisdom, high political will and courage on the part of the current administration to advance trade.
This is just as it also noted that the secured agreement would help in providing adequate local currency liquidity to Nigerian and Chinese Industrialists and other businesses, thereby reducing the demand for dollar and the attendant difficulties encountered in the search for third currencies, amongst other potential benefits.
However, the umbrella body of the nation’s traders, pointed out that in order not to make the deal a loss to Nigeria in real economic terms there was the need for the government to be cautious in its implementation of the deal.
Specifically, the NANTS warned that the currency swap deal, with its unrestricted access to the Yuan, at an overvalued Naira exchange rate of N30/Yuan, had the propensity to trigger increased volume of imports to the country, adding that the surge in Chinese imports if unchecked, especially given the history of appetite of Nigerians for imported goods, would negate the Federal Government’s import substitution agenda, stifle domestic production and place local industries in a pitiable and vulnerable condition with attendant effects that would defeat government’s efforts at job creation.
Substantiating its claims with verifiable figures, the NANTS explained: “Statistically, we note that in 2015, Nigeria’s trade volume with China rose to $14.94 billion, representing 22.2% of the $78.56 billion it traded with her eight biggest partners. At present, about 78.1% of the nation’s import of consumables comes from the Asian Tiger, and these are items that flow into the market space in large volumes and turnover.
“As the umbrella body of Nigerian traders, it is worthy of note that in our calculation close to 68% of traders regularly leaving the shores of the country at the various airports for imports on daily basis are heading towards the Chinese market.
“It therefore makes a lot of sense to tie the nuts with the Chinese currency not only to facilitate seamless transactions but also to reduce the multiple jeopardy faced by traders and importers who would exchange the local Naira to Dollar and from Dollar back to Chinese Yuan, thereby losing currency value at two poles.
“More so, the currency swap implies that Chinese Yuan is free to flow among different financial institutions in Nigeria just as is the case with the US dollar, Euro and Pounds Sterling, and to that end, Nigerian businesses could transfer funds to China in the local currency without the hassles of passing through Bureau de Change or creating unnecessary stress for the CBN”, the association added.
Against this backdrop, NANTS therefore called on government’s agencies and in particular, the Nigeria Customs Service to be alert to its responsibilities in order to protect the country from unbridled influx of goods.
In addition, the association urged the Central Bank of Nigeria (CBN) to must ensure that constant oversight and regulation was prioritised in its monetary policy effirts so that the rise in demand for the Yuan will not result in a possible depreciation of the Naira against the Chinese currency and further widen the gaps in trade balance and balance of payments in favour of China.
The NANTS also called on government Agencies such as the Standards Organization of Nigeria (SON), the National Agency for Food, Drugs Administration and Control (NAFDAC), the Consumer Protection Council (CPC) to be alert and ready for combat to ensure that the currency swap deal and its possible attendant surge in imports did not turn the country into a dumping ground for inferior/substandard Chinese products.
NANTS stated further that the existing trade deal between Nigeria and China must be revisited and retooled at this moment to strengthen control and sanction mechanism against irregular and sub-standard exports from China targeting the Nigerian market.
This is even as it charged Nigerian business actors and the Nigerian Export Promotion Council (NEPC), particularly the Commission, on their duty against the realization that the currency deal not only opens the vista for imports from China but also throws open the window of opportunities for Nigerian exports to China that must be explored.
According to Ukaoha, in practical terms, NEPC must therefore step up the collaboration with Nigerian traders and the Nigerian representative/Diplomatic Offices in China to identify such local commodities and items that could be exported to the Asian Tiger.
The National President expressed the association’s believe that Nigeria’s recent increase in agricultural productivity should rev up efforts towards exportable agro-commodities which would further trigger proportionate increase in productivity that will benefit farmers as well as industrialists.
The association recommended in addition to the canvassed measures, Government must sit up and aggressively pursue export-based economic policies, including a predictable/secured business environment and reliable trade policy enactment, as well as technology transfer agenda capable of attracting and receiving Chinese and other investors to confidently engage the nation’s economy for the expansion of their business interests.
