China’s efforts to position its currency, the yuan, as a rival to the US dollar in international transactions, have gained traction in Africa. African governments and private sectors are increasingly using the yuan, driven partly by growing Chinese investments in Africa and partly by a broader shift away from dependence on the US.

African governments are not replacing their national currencies with the Chinese yuan, nor are they formally linking their currencies to it or joining its currency, the renminbi (RMB). Although the Yuan is a measure of the renminbi, yuan is often used by non-Chinese in preference to the more cumbersome renminbi or RMB. While the usage of the yuan in Africa in preference to the US dollar in Africa is not an immediate likelihood, China’s formal invitation to African nations to join its yuan-based cross-border payment system has elicited interest from African central banks. Beijing aims to internationalise the yuan and reduce reliance on the US dollar in global financial transactions.

China’s push to expand the yuan’s use in Africa is a natural extension of decades of growing Chinese economic, diplomatic and military engagement with the continent, where the latter two rely heavily on the success of the former. Trade volumes between China and Africa have increased significantly, as have financial transactions. China’s trade with Africa in 2024 totalled US$ 296-billion, up 6.1% from the year before. South Africa is China’s largest partner, with US$ 55.4-billion in trade in 2024. China’s need for minerals was responsible for a 51% increase in trade with the DRC, to the amount of US$ 22-billion; while minerals from Guinea drove trade up 19%, to US$ 12-billion. Nigeria (US$ 21-billion) and Egypt (US$ 17-billion) are other major trading partners. The question has become, should this trade now be conducted in the yuan.

Data sources: Eco Finance Agency, Diplomacy, 2025

For African nations, trade with China brings tangible benefits. It is well-established and offers several advantages, including education opportunities in China, locally delivered training opportunities for Africans that are funded by Beijing and diplomatic support at international fora, such as the UN.

Thorough planning and investment draws Africa to Chinese financial partnerships

China’s financial outreach to Africa over the past 15 years has been marked by careful planning, strategic rollouts and selective partnerships. Now in its twelfth year, the Belt and Road Initiative – known in China as “One Belt One Road” – was launched in 2013 as a strategy to invest in more than 150 countries and international organisations. As of 2025, more than a third of these partners are African nations, engaged in infrastructure, trade and development initiatives. Crucially, the linchpin of this connectivity, as well as the mechanism that enables the yuan’s use globally, is the infrastructure to move the yuan from bank to bank.

Launched in 2015 and modelled after the SWIFT electronic money transfer system, China’s Cross-border Interbank Payment System (CIPS) is now being utilised by an increasing number of African corporate, financial and governmental entities. CIPS’s participants include Chinese banks with international branches but also major Western institutions, such as Citibank, JP Morgan and the UK’s HSBC.

Investment often follows the ease of doing business, one of its principal enablers being the ability to move funds seamlessly across borders. The CIPS precisely facilitates this for transactions in the yuan. At a ceremony held in Shanghai in June 2025, two of the six new international financial institutions joining CIPS were African: the African Export-Import Bank (Afreximbank), headquartered in Egypt, and South Africa’s Standard Bank. Both now have direct CIPS memberships, allowing them to process yuan transactions independently without intermediary institutions.

As Chinese investments continue to emerge in Egypt, these developments further strengthen financial ties between China and both North and Sub-Saharan Africa. Standard Bank operates across ten Southern African and ten Sub-Saharan countries. The investment opportunities arising from this alignment with China, promised at the Belt and Road Initiative’s launch, remain a key draw for African states. As of June 2025, 53 of Africa’s 54 countries have joined the Belt and Road Initiative. Most now have access to yuan-denominated transactions through the CIPS.

China’s currency inroads into Africa reflect shifting global power dynamics

China’s growing financial partnerships with African governments and private sectors are unfolding against the backdrop of superpower rivalry with the US. Africa’s movement into the Yuan Zone comes at a time when US-Africa relations are strained, particularly due to Washington’s increasingly protectionist trade policies. The US has imposed politically motivated tariffs, including a proposed 30% levy on South African exports in retaliation for Pretoria’s legal case against Israel at the International Court of Justice, accusing Tel Aviv of crimes against humanity in Gaza.

In Lesotho, an economic crisis with severe political and social implications has been largely attributed to Washington’s actions. The US created Lesotho’s manufacturing sector under the 2001 African Growth and Opportunity Act, which offered Lesotho’s goods quota-and duty-free access to US markets. The abrupt withdrawal of these benefits has forced Lesotho’s government to declare a national state of disaster, while American-linked factories close and unemployment soars.

For decades, African governments have voiced frustration with the conditionality of US trade, particularly the requirement to demonstrate good governance and human rights compliance. While these are admirable standards, many African leaders feel they should not be preconditions for trade. China imposes no such conditions.

Specifically, South Africa has also acted as a regional proxy within BRICS – the intergovernmental organisation originally comprising Brazil, Russia, India, China and South Africa – recently expanded to include five additional nations. Although a dedicated BRICS currency has been proposed, none has materialised. China would prefer the yuan to serve as the de facto BRICS currency. Given recent developments, this may soon become a reality. It is therefore unsurprising that South Africa, a founding BRICS member, is aligning more closely with China’s currency system. The fact that Standard Bank is the first Sub-Saharan institution to join CIPS reflects this alignment.

The critical points:

• African nations are not replacing their national currencies with the yuan but are increasingly using it for international transactions
• Only one African country has not joined China’s Belt and Road Initiative, while two major African financial institutions have joined the yuan-based CIPS network
• This shift comes as China gains influence, while the US loses ground by erecting trade barriers and politicising economic relationships

Written by In On Africa