Currency Swap Deal Will Check Influx Of Fake Products – CBN

The Central Bank of Nigeria (CBN) has assured that the currency swap agreement with the People’s Bank of China will help reduce the influx of substandard products brought into the country from China.

Central Bank Governor, Mr Godwin Emefiele, said it was not possible for importers to bring in fake products into the country under the currency swap agreement as adequate measures has been put in place to check abuse of the terms of contract reached under the currency swap deal.

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Emefiele, who was speaking at the naira/renminbi swap deal engagement with stakeholders from North Central Zone in Abuja, said only goods approved by regulatory bodies such as Standards Organisation of Nigeria would qualify under the agreement.

The Currency Swap Forum brought together stakeholders in the trade sector – importers and exporters – to sensitise them on the conditions and benefits of trading under the new Reminbi denominated window.

Represented at the event by the Acting Director, Corporate Communications of the bank, Mr. Isaac Okorafor, the governor said, “The substandard products you see are products that are bought through informal channels. With this deal, trade will follow the formal channel. You won’t see any cash. We will also work with all the relevant regulatory organisations like SON and NAFDAC so that imports are only through companies that adhere to global standards.”

He further explained that the swap arrangement will also eliminate all black market deals and also help reduce the pressure on the demand for the dollar and help preserve Nigeria’s foreign reserve.

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“China accounts for a third of our imports, which means imports from China constitute huge burden on the foreign reserve. Thus this currency swap will reduce the demand for the dollar for imports by at least one third.”

He added that the measure “will enable us hold our foreign reserve so that investors will have confidence on our economy because they know anytime they want to take their money out, they will always have dollars.”

Also at the event, Mr Richard Maikai of the Trade and Export Department, CBN, said bureau de change operators were not eligible to take part in the transaction as cash transactions would not be allowed under the window.

In his remarks, the President of the Abuja Chamber of Commerce, ABUCCIMA, Mr. Adetokumbo Kayode, said sensitisation of stakeholders on the deal would impact on the utilisation of currency swap opportunities.

He called on the government to implement favourable business policies to fast track economic growth in the country.

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Recall that the CBN and PBoC on 27 April 2018 signed a three-year renewable bilateral currency swap deal worth about N720billion or 16billion Renminbi, both equivalent of $2.5billion.

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