By SIMEON OGOEGBULEM
Nigerian businesses trading with China have gained access to a new cross-border payment arrangement designed to reduce transaction delays, intermediary banking costs and exposure to multiple currency conversions.
Stanbic IBTC Bank introduced the Cross-Border Interbank Payment System (CIPS) in Lagos, allowing local businesses to initiate payments in naira for settlement in Chinese Yuan.
The arrangement is facilitated through its parent company, Standard Bank Group, which participates directly in China’s cross-border interbank payment infrastructure.
Stanbic IBTC Chief Executive Officer, Wole Adeniyi, said the bank’s connection to the system made it possible to extend the service to Nigerian customers.
The bank says the platform could reduce transaction processing time from between 48 and 72 hours under traditional channels to approximately 24 hours.
For Nigerian importers, manufacturers and other businesses purchasing goods from China, the development could simplify international settlements and reduce some of the costs associated with intermediary currencies and correspondent banking arrangements.
The development is particularly relevant because China remains one of Nigeria’s major trading partners, with Nigerian businesses importing machinery, industrial equipment, electronics, textiles and other products from the Asian economy.
However, the introduction of a Yuan settlement channel does not necessarily eliminate Nigeria’s foreign-exchange challenges.
Experts in international trade were of the opinion that businesses will still need access to the appropriate currency liquidity, competitive conversion rates and reliable settlement arrangements.
The experts said that actual savings will depend on transaction charges, exchange-rate arrangements, participating counterparties and the volume of trade conducted through the platform.
The initiative also raises a broader policy question: whether Nigeria can expand local-currency settlement arrangements without compromising transparency, effective exchange-rate management and financial-system stability.
Financial Analysts said a more efficient payment corridor with China could reduce transaction friction for Nigerian businesses and support trade diversification.
According to the analysts, the success of the new initiative would be ultimately measured by actual transaction volumes and demonstrable cost savings.
