A significant recalibration of African trade finance is underway. Companies across the continent now have the practical ability to settle transactions with Chinese suppliers directly in renminbi (RMB), potentially eliminating long-standing dependence on the US dollar.
Standard Bank’s recent integration with China’s Cross-Border Interbank Payment System (CIPS) is seen as a structural development that has the potential to change the buying, settlement and pricing dynamics between African buyers and Chinese sellers.
For decades, dollar settlement has been the unchallenged norm. African importers typically attract double currency conversions, local currency into dollars and dollars into yuan, along with the risk of volatility, bank fees, and long settlement schedules. RMB settlement removes an entire layer of friction.
Payments are cleared directly in China and the financial architecture is beginning to reflect the reality of modern African supply chains that are deeply integrated into China’s manufacturing ecosystems.
Why does this matter now?
Africa’s import relationship with China is no longer opportunistic, but entrenched. From mining equipment and auto parts to infrastructure materials, electronics and retail products, Chinese goods underpin many African value chains.
Aligning payment rails with sourcing hubs accelerates competition. Considering the increase in yuan settlement, three advantages are immediately apparent:
cost reduction – Removing USD from the settlement loop eliminates conversion costs and lowers supplier premiums. Chinese exporters receiving RMB avoid the need to maintain a USD buffer, creating room for more accurate pricing. Its advantage is not ideological, it is mathematical.
Speed and predictability – CIPS processes transactions in hours rather than days. Fewer correspondent banks mean fewer delays in compliance, less dependency on SWIFT, and less working capital. RMB settlement reinforces this advantage.
Strategic Optional – Dependence on currency is a form of vulnerability. The ability to trade outside of dollar channels is not a rejection of the dollar, it is a hedge against volatility, exposure to sanctions, rate cycles and foreign liquidity constraints. Optionality is no longer a luxury, it is operational flexibility.
BRICS layer
It’s tempting to see this shift as a BRICS-led attack on the dollar. This narration is neat, but incorrect. BRICS has neither provided a competitive reserve currency nor replaced the dollar in global settlement systems. What BRICS has done is remove the taboo on non-dollar trade.
When bloc leaders discuss local currency settlement, they are not redefining the global budget. They normalize the idea that settlement can happen without going through the Washington money pipeline.
This intellectual permission is important. This creates an environment where African banks adopting RMB rails are no longer seen as far-fetched cases, but as pragmatists responding to business logic.
The yuan change in Africa does not exist because the BRICS demanded it.. It exists because African businesses are tired of paying transaction premiums for the privilege of using a currency that neither represents the origin of their goods nor their main trading partner.. BRICS may have mentally opened the door, but it has let African economies through.
Adjusted realism and challenges ahead
However, this development is not a frictionless transition. Several limitations remain:
RMB market depth limited – The yuan is not yet a fully globalized currency. Liquidity, hedging tools, and historical pricing data against USD markets are still evolving. Treasury functions across Africa need time to adapt.
Regulatory alignment – Central banks, customs authorities and documentation frameworks are built on dollar assumptions. RMB adoption requires new policies, reserve structures and guidance to avoid operational bottlenecks.
supplier diversity – Not all Chinese exporters immediately welcome RMB bills. Legacy systems, pricing models, and USD-based coverage preferences slow uniform adoption.
where is this..??
In the short term, the RMB will coexist with the USD. In the medium term, RMB settlement becomes a competitive lever for African companies with regular China exposure and currency-sensitive procurement timelines.
In the long term, if liquidity deepens and African banks expand support for the RMB, the continent could see a real structural shift, not because the dollar collapsed, but because it was not the only tool available.
“Given that China is Africa’s largest export market, the new payment system will simplify and speed up the clearance of transactions between the two markets.Standard Bank said while announcing the launch on its website.
According to Standard Bank’s Trade Barometer 2024, 34 percent of surveyed businesses source their imports from China, compared to 23 percent of surveyed businesses in May 2023.
This question has now evolved. It is no longer whether African businesses can be based in RMB. What matters is whether they understand the strategic implications well enough to take advantage of this option earlier, better and faster than their competitors.
conclusion
The story of the African yuan settlement is not a subplot in the geopolitical competition of others. This is a pragmatic adjustment in the geography of supply chains. The dollar will prevail, but it will no longer be alone.
RMB is the first authentic alternative with real tools for African shopping realities.
Whether other currencies within or beyond BRICS ultimately follow will depend on whether they can match the instrument, because without real transaction value, no currency, regardless of political passion or bloc alignment, can meaningfully challenge the dollar’s entrenched role in global trade.
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