Buhari’s Trip to China will Boost Economy with Focus on the Chinese Currency, Yuan (Not the Dollar)

by Uche Onegeria 21 Apr , 2016  

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We have speculated (which is what we are truly good at) but here is the Truth! 

The Chinese government has been looking for a ways to Internalize their currency and also sought a trade hub in the African continent. They initially considered Ghana as their main hub but chose Nigeria instead because of our country’s size and economy.

“So, if Nigeria is buying Chinese goods, for instance, it will be in our interest to use the Yuan because we know there is a lot of squeeze for the dollar. But, we still use the dollar. But if it is not enough and there are some people who want to invest in the country, instead of crying that they cannot take dollar out, there might be Yaun that they would be happy to take out because it is now internationalised as a currency and they can use it”.

“So, it gives us a much larger option. As you know, a lot of importers now are complaining that they are not able to access the dollars to buy goods and things like that. What it takes is that as the Chinese economy goes strong, there are some pressures on them from the trading partners, international financial institutions. They agreed that the money should be internationalised. They were protecting it also. They did not allow it to be fully exchangeable. But now, their economy is fully strong; they are looking for a way to internationalise the currency. Now, they were saying essentially that they wanted to segment it”

Geoffrey Onyeama, Minister of Foreign Affairs

In summary, Nigeria’s over-dependence on the US dollar would reduce with this deal as most international transactions with China would be in their own currency, the Yuan.

The world’s dependence for the US dollar has crippled the economies of most countries, Canada even. Yes! Many Canadians have lost their jobs because their economy also relied on Petroleum being exported to the United States (just like Nigeria). However, the United States have become self-reliant on Petroleum. They now produce enough to sustain it (at least for now). You can imagine how that has impacted the Nigeria economy and the US dollar rate.

Many people went on ranting tirades on social media questioning President Buhari’s visit to China again. “Oh, he went to borrow 2 billion Naira”. I watched “thoughts” from people who have no economic backgrounds whatsoever nor any management skills, stream through my timeline. Do you know what I did? I waited patiently for when his real reason for that trip came to light and it has. I did not blog hoax or speculations… That is what I am imploring everyone to do. Seek the truth not just picking off crumbs from social media.

Do not get me wrong; I am not a big fan of President Buhari. I am only a fan and an advocate of great things for all Nigerians.
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If you want the progress of the people on this country, at least hope that our leaders do right by them irrespective of any personal agenda you might be in pursuit of. Let us not put that agenda before the needs of our people who are already suffering.

And my advice to Nigerians is to ask the question “Why?” instead of following the bandwagon and assuming the worst in all situations. Seeking ACTIVE SOLUTIONS is the key to surviving our tough predicament.

Thank you all. Things will surely get better!
Edited from Vanguard

2 Comments

  1. Good idea but my question is don't the Chinese use the dollars for foreign exchange too? What if they are at lost after converting the inflow to dollar, will they continue with the agreement?

  2. My dear, I think the idea is that since we will be doing business with the Chinese, we will exchange with their currency instead of the dollar.. That way, we do not have to rely on dollar for transactions that are not even in the US sef…and the FOREX rate would fall (since the dollar demand would reduce)

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