Why Africa Should Care About RMB Payments
Africa’s heavy reliance on the U.S. dollar leaves it vulnerable to global shocks. With China’s CIPS expanding and RMB trade rising, African countries now have a chance to diversify, lower costs, and gain more financial autonomy. The shift to yuan payments isn’t political — it’s strategic, and it’s already underway.
Africa’s trade future is tilting east, and with it comes a quiet but powerful shift in how money moves. The rise of China’s Cross-Border Interbank Payment System (CIPS) and the growing use of the Chinese yuan (RMB) in international trade aren’t just global finance headlines; they’re early signs of a change that could redefine Africa’s economic independence.
The Core Truth
Africa’s economies remain heavily dollar-dependent. Nearly 80% of African imports and exports are invoiced or settled in U.S. dollars, even when neither the buyer nor the seller is American. This dependence locks Africa into dollar liquidity cycles, FX shortages, and currency volatility driven by policies far beyond its borders.
China, meanwhile, is offering an alternative: settle in RMB. Through CIPS, its expanding cross-border payment network, China has made it technically possible for banks across 189 countries to transact in yuan directly. That includes a growing number of African institutions.
The Strategic Shift Behind the Yuan
Let’s be clear: the yuan is not replacing the dollar tomorrow. But its rise is no accident.
Beijing has spent a decade building the plumbing for an alternative global payment system, from CIPS, which now processes over $12 trillion in transactions annually, to bilateral currency swap agreements with over 40 central banks, including Nigeria, South Africa, and Egypt.
The goal is straightforward: make the RMB a viable settlement and reserve currency for trade and finance, especially across the Global South.
Why It Matters for Africa
There are three hard reasons Africa should care.
1. Lower Transaction Costs
African importers often pay 3–5% more per transaction simply because dollar settlements pass through multiple correspondent banks. RMB payments via CIPS cut those layers. Direct settlement between African and Chinese banks can reduce fees, speed up clearing, and improve cash flow.
2. Resilience Against Dollar Volatility
When the Federal Reserve hikes rates, African currencies weaken, import costs spike, and governments scramble for scarce dollar reserves. RMB settlement gives countries more flexibility. If part of your trade is in yuan, you’re less exposed to dollar liquidity shocks.
3. Financing Leverage and Access to Credit
China is already the continent’s largest trading partner, accounting for nearly 20% of all African trade. As Beijing shifts toward settling more trade in RMB, African governments and businesses that can operate in yuan will have easier access to Chinese credit lines, infrastructure funding, and trade finance.
Early Movers: Who’s Already Acting
South Africa’s major banks, including Standard Bank, are connected to CIPS.
Nigeria and Egypt have signed currency swap deals with China’s central bank, allowing local businesses to access RMB directly.
Kenya’s central bank is studying mechanisms to expand RMB use in trade settlements, particularly for goods imported from China.
Tanzania, with Chinese imports exceeding $2 billion annually, is well-positioned to follow. If local banks integrate CIPS or partner with intermediary banks that already have access, Tanzanian importers could cut settlement times from several days to a few hours.
The Obstacles Ahead
None of this is friction-free. RMB’s limited convertibility, shallow offshore liquidity in African markets, and lingering trust in the dollar will slow adoption.
Central banks must also weigh the political and monetary risks of overexposure to China’s financial system.
But ignoring the shift is a bigger mistake. As China’s global payments infrastructure grows, Africa risks being a passive user of systems built elsewhere, once again adapting to someone else’s monetary rules.
The Bigger Picture
The global economy is quietly moving toward a multi-currency reality. The dollar will remain dominant, but it will increasingly share space with the yuan, euro, and digital currencies. For Africa, this moment presents a rare opportunity to diversify financial risk and assert more control over its trade future.
If African central banks, regulators, and financial institutions act now, by upgrading systems, deepening RMB liquidity, and linking with CIPS, they can shape that future instead of inheriting it.
The Bottom Line
RMB payments aren’t just about China. They’re about Africa’s financial sovereignty.
The choice isn’t between Beijing and Washington, it’s between dependency and diversification.
The yuan won’t fix Africa’s trade imbalance overnight. But it might finally give the continent something it’s long been denied in global finance — options.