Nigeria abandons the dollar: the new 'African currency' is the yuan
Abuja will use the Chinese currency for all economic transactions. After Angola and the "petroyuan", even the biggest African economy chooses China as its main commercial partner. It is estimated that 22% of Africa's debt is contracted with China.
Abuja (AsiaNews / Agencies) - Nigeria signed an agreement with ICBC, the most important Chinese bank in March, with the aim of adopting the yuan as a commercial currency. The African country has made a currency exchange worth $ 2.5 billion in yuan. The goal is to facilitate trade between the two countries. Nigeria's choice indicates an already established trend in Africa: at the end of May, fourteen African countries and seventeen central banks gathered in Zimbabwe to adopt the yuan as a currency reserve.
The Chinese currency is the seventh currency used in trade: this is 2% of world transactions. Nigeria has abandoned the dollar following the fall in the price of crude in 2014. On that occasion the African country had been forced to sell its dollars on the interbank market to increase the liquidity of the Nigerian naira (the national currency).
On the other hand, the introduction of the yuan is a useful move for Nigeria also to repay its debt with China. It is estimated that 22% of Africa's public debt is contracted with Beijing. By adopting the Chinese currency, the risks deriving from the exchange rate and the fluctuation of monetary values are eliminated.
The agreement with Nigeria comes after two years of negotiations. In this way the yuan will become the second commercial currency of Nigeria, among the first economies of Africa. The pact comes after another important agreement signed by China with Angola. The latter is China's first partner for oil imports. In 2015 the two countries signed an agreement in Shanghai for which China can pay Angolan oil, the so-called "petroyuan", in yuan. China is the world's leading importer of crude oil, with nine million barrels a day.