Market News

LAGOS – Nigeria’s efforts to deepen trade relations with China and reduce the cost and delays associated with international transactions received a boost as Stanbic IBTC Bank introduced a cross-border payment platform enabling local businesses to initiate payments in naira and settle directly in Chinese yuan.

The platform, known as the Cross-Border Interbank Payment System (CIPS), is expected to reduce transaction processing times from between 48 and 72 hours under traditional payment channels to approximately 24 hours. It is also designed to minimise foreign exchange exposure, reduce transaction complexities and improve payment predictability for businesses operating along the Nigeria-China trade corridor.

The development is significant for Nigerian importers, manufacturers and other businesses, given China's position as one of Nigeria's major trading partners and the challenges associated with multiple currency conversions, intermediary banks and settlement delays in international trade.

Speaking at the CIPS go-live ceremony in Lagos, Stanbic IBTC Bank Chief Executive Officer, Wole Adeniyi, said the platform was made possible through the direct participation of its parent company, Standard Bank Group, in China's cross-border interbank payment infrastructure.

According to him, the group's participation provides the Nigerian bank with direct access to the system, enabling it to extend the service seamlessly to businesses and other customers in Nigeria.

"What really made it possible for us to do this is because our group, Standard Bank Group, is a direct participant in the China Cross-border Interbank Payment System.

"As a direct participant, we can connect and bring this service seamlessly to our clients in Nigeria," he said.

Adeniyi explained that the initiative aligned with the bank's broader strategy of strengthening financial and commercial connections between Nigeria and China. He added that improved payment infrastructure would support businesses seeking to expand their operations and trade activities across both markets.

In his presentation, Stanbic IBTC Bank's Head of Transaction Banking, Jesuseun Fatoyinbo, described CIPS as a purpose-built clearing and settlement infrastructure designed to facilitate international payments denominated in Renminbi (RMB).

He said the platform would provide Nigerian businesses with a faster, more efficient and reliable alternative for cross-border payments, eliminating some of the complexities associated with conventional international payment channels.

Using an analogy, Fatoyinbo likened the platform to a direct flight from Lagos to China, explaining that it would enable payments to reach their destination without passing through several intermediary routes.

He noted that although traditional payment channels would remain available, CIPS would provide businesses with a more direct route for settling transactions with Chinese counterparts.

Also speaking at the event, Central Bank of Nigeria (CBN) Director of Trade and Exchange, Aderinola Shonekan, described the rollout as a landmark development capable of addressing longstanding challenges confronting Nigerian businesses involved in trade with China.

Shonekan, who was represented by CBN Assistant Director of Trade and Exchange in Lagos, Nnenna Ann Ezekannagha, said Nigerian importers and entrepreneurs had for years contended with transaction delays, multiple currency conversions and settlement volatility arising from their reliance on third-party intermediary currencies.

She observed that despite China's importance as one of Nigeria's largest trading partners, the absence of more direct payment arrangements had continued to expose businesses to additional costs and operational uncertainties.

She said Stanbic IBTC's integration into China's CIPS infrastructure would provide a significant solution to these challenges by establishing a more direct financial connection between Nigerian businesses and their Chinese counterparts.