Nigeria’s Naira is at the lowest since time memorial which makes it harder for traders and companies that are into importation to trade. China is a global exporter of different products and Nigeria runs an economy that solely depends on importation despite what the Nigerian government wants its citizens to believe. Hence, China and Nigeria’s business relationship can’t be separated.
The Central bank of Nigeria has put restrictions on the debit cards of Nigerians, limiting the monthly spending on online payments outside Nigeria to just $100. These restrictions were done by the Central bank of Nigeria to limit forex exchange and bitcoin transactions within Nigeria. However, unbeknownst to the government that the importation and trading sector of the country would be hit the hardest by these restrictions.
Chances are that if you reading this article you are among the traders or companies that these restrictions have affected, limiting your capability of trading with Chinese suppliers and manufacturers. In this article, we would be going over different methods that offer solutions on how to pay Chinese suppliers/ manufacturers from Nigeria. So let’s jump right in!
Despite PayPal officially not being supported in Nigeria, there are ways to get around the location restriction of PayPal for residents in Nigeria. It’s easy to try funds in PayPal but it’s also a risky payment system, so it’s best to use it when there has already trust established within yourself and the supplier/manufacturer. The biggest factor about using PayPal is that not all Chinese suppliers/manufacturers have access to Paypal. So Paypal isn’t a go-to solution for paying Chinese suppliers from Nigeria.
Read Now: How to open a PayPal account in Nigeria.
Disputes in PayPal take months to resolve and sometimes the solution might not be to your liking. Also, PayPal is an expensive payment medium due to the fees are based on percentage. The more money sent via Paypal the bigger the fees.
Rating: Paypal is favorable for Nigeria importers because of the fees system and the risk involved in sending money via Paypal. On a scale of 1-10, I’m giving Paypal a rate of 3/10. Only use it as a last resort.
Payment via an agent (preferable a Nigeria)
There are Nigerian that are living in China (mostly around Guangzhou) whose jobs are importation, payment errands, and getting contacts of a supplier for a particular product. These agents can receive the naira in their Nigerian account and pay the Chinese supplier in China via bank transfer or Alipay/Wechat.
When looking for an agent to use as a medium for payment, it’s best to use an agent that a colleague or a friend has used before in order to avoid fraud.
Rating: Using an agent is quite simple but by far very risky. Don’t use an agent nobody knows because in one swoop your money is gone for good. When a reliable agent is found this is the easiest way to make payments to Chinese suppliers. On a scale of 1-10, I’m giving Paypal a rate of 6/10. Only use it as a last resort.
China became a digitalized economy in 2014 meaning that everything from payments to the least possible thing you could think of can be done online. Online payments in China are spare headed by Alipay and WeChat.
Having an Alipay account in Nigeria means that you can directly pay any Chinese supplier. However, the biggest problem you would encounter is how to buy yuan/RMB in Nigeria and receive it in your Alipay in other to pay the Chinese supplier.
Once you have yuan in your Alipay account, simply ask the Chinese supplier for their Alipay pay code and forward the money. Yes! it’s that simple. Unlike Paypal, Alipay is used by almost all Chinese citizens.
Rating: Using Alipay or WeChat as a payment method when dealing with Chinese suppliers is the biggest and safest method. The only problem you would encounter is buying and transferring yuan to your Alipay. On a scale of 1-10, I’m giving Alipay a rate of 10/10.
International Money transfer/ Western Union
In any other country, this would be the best solution to the problem of paying Chinese suppliers but in Nigeria, not everyone has access to Western union/ International money transfers. Those who do have access are restricted to how much can be sent within a month.
A supplier won’t wait for 3 months to receive $3,000. The western union should be used when the amount to be paid isn’t much. Western Union is very fast but equally very risky. It’s accepted by most suppliers because of how fast it’s to receive the money. It’s important to note that when sending money to a Chinese supplier a simple mistake in the name placement would result in the money being declined by the Chinese government because of anti-fraud regulations.
Rating: Using western union or international money transfer isn’t cheap and with the restrictions placed on it by the Nigerian government. It’s should be used when there are not any other options. On a scale of 1-10, I’m giving International Money transfer/ Western Union a rate of 4/10.