In what appears to be one of the most brilliant economic policy measures of the year, Nigeria plans to include the Chinese yuan as part of its foreign exchange reserves, according to the central bank.
This is a seismic shift in Africa – Euro-American relationship, because Nigeria is one of it largest oil producer and one of its biggest economies.
It was unclear what role if any Standard & Poor’s recent downgrade of the US credit rating played in Nigeria’s decision to diversify its foreign exchange reserves.
The Central Bank governor Lamido Sanusi, told Newsmen that the Chinese yuan would account for between five and 10 percent of reserves. There is a potential for further increase in the future.
Nigeria will continue to hold the dollar and the euro as part of its portfolio of holdings. Nigeria’s current reserves total around $33 billion.
“Given the growing economic importance of China in the world, and the increasing trade flows between the two countries, the (central bank) initiative is expected to secure a strategic advantage for Nigeria in its economic and trade relationship with the People’s Republic of China,” a central bank statement said.
This decision basically secures Nigeria’s economic independence, as it is now protected by market forces rather than a cabal of oligopolistic Euro-American money mafia.
It deepens Nigeria’s international appeal as its economic policies will no longer be perceived as being unduely favourable to United States or Europeans.
Furthermore, it protects the economic security of Nigeria because with this decision, it has hedged its bets much better. As the old saying goes, you cannot put all your eggs in one basket. Especially a basket as decrepit as the current state of Euro-American economies.
Traders will now flow from all over the world to this mighty empire of oil, gold, milk and honey. Its wealth will now be sold at their true international competitive value. The citizens will prosper.
Many nations have nutured thoughts about diversifying their foreign exchange reserve portfolio but few have had to courage to implement such a policy. Among the few one can count Russia, Venezuela, China, Brazil, India, Iran and now we have Nigeria. These are the so-called BRICs countries. In those countries one finds the greatest concentration of the world’s resources and human populations.
In those countries, one finds the world of the future springing up.