Central Bank of Libya Governor Naji Issa met with his Chinese counterpart, Pan Gongsheng, in Beijing last month, and Libyan lenders are now expected to connect to CIPS, China’s SWIFT alternative, enabling direct yuan settlements. Libya is also eyeing panda bonds, yuan debt sold in mainland China, to help fund rebuilding after years of conflict.
Two other major African institutions, the continent-wide African Export-Import Bank and South Africa’s Standard Bank, already run on the same system. Zambia has pushed further still, requiring Chinese mining operators to pay their local tax and royalty bills in yuan since the start of the year, money Lusaka then sends on to Beijing against its own import bills and debt payments.
Retail-level trade is adapting too, without any bank’s help. In markets like Nairobi’s Eastleigh and Lagos’s Alaba district, traders route payments to Chinese suppliers through logistics firms that convert local currency into yuan on the spot, cutting the dollar out of the transaction.
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Beijing has practical reasons to focus here. Dollars and euros are often scarce across the continent, making yuan settlement a more natural fit than in markets flush with hard currency. This fits a pattern that has held for more than a year, with Beijing using African deals to expand the yuan’s international footprint and chip away at the dollar’s dominance.
Two-way commerce between China and Africa hit $348 billion last year, a 17.7% jump, and Beijing has topped the continent’s list of trading partners for 16 straight years. A zero-tariff policy Beijing introduced in May extended duty-free access to goods from every African nation that maintains diplomatic relations with China, 53 countries in total.
Researchers at the African Economic Research Consortium and Boston University, in a joint bulletin, found that raw materials and extractive commodities still dominate what Africa sells to China, rather than higher-value goods. They also warned that debt payments to China are projected to climb through 2030, potentially squeezing out African government funding for health and education.
