More Nigerians are turning to China for their daily items and business needs despite numerous reports of quality-related issues.
A recent report by the National Bureau of Statistics (NBS) has shown China was Nigeria’s largest import trading partner in the third quarter of the year.
According to the report, 30.51 percent of Nigeria’s total imports in the quarter came from China, while Nigerians only imported 8.96 percent from the United States, 8.24 percent from the Netherlands, 6.58 percent from India and 3.95 percent from Belgium.
Some of the reasons Nigerians now preferred Chinese products to American products is affordability, many small businesses explained that American products are generally expensive due to the numerous devaluations of the Naira in recent years.
This year alone, the Naira has been devalued against the American Dollars three times by the Central Bank of Nigeria (CBN), making American products unnecessarily expensive and practically unaffordable by most Nigerians that are struggling with the high unemployment rate and low household incomes.
The introduction of Chinese Yuan as a base currency following the Bilateral Currency Swap Agreement (BCSA) signed with the People’s Bank of China (PBoC) on April 27, 2018 helped reduce the pressure on US dollar across key foreign exchange market, according to most businesses. Despite the small amount traded in Yuan by the Central Bank of Nigeria, they said the introduction of Yuan helped curb what could have been a catastrophe given COVID-19.
With oil revenue at a record-low and the central bank struggling with dollar liquidity issues, Naira would have hit over N600/$ at the parallel market without the introduction of Yuan to ease dollar demand and broaden traders’ options.
