Although Africa’s trade with China is rapidly deepening, the two regions have been held back for years by slow, expensive international payment systems that rely heavily on the US dollar.
That financial friction point is now shifting. In June this year, Afreximbank, Africa’s multilateral trade bank, became the first major African institution to join China’s Cross-Border Interbank Payment System (CIPS), enabling direct, faster, and cheaper yuan transactions.
Last week, Standard Bank Group, the continent’s largest lender, followed suit. The dual move marks a turning point in Africa-China trade finance, signalling a wider push toward seamless renminbi settlements and a gradual reduction in dependence on dollar-clearing channels.
Afreximbank says joining CIPS creates a direct pathway for processing payments in Chinese currency, eliminating intermediaries, cutting costs, and speeding up financial flows.
Standard Bank, whose operations span 20 African countries, says the integration will simplify transactions for African businesses trading with China and enhance the competitiveness of firms operating across the two markets. Telecom giant MTN, another direct CIPS integrator, describes the move as a game-changer for Africa-China trade, enabling renminbi-based settlements at scale.
China has been Africa’s largest bilateral lender and a leading investor in infrastructure, energy, mining, agriculture, and logistics for more than a decade. It is also the continent’s biggest source of imports and a major buyer of African commodities.
Trade between Africa and China reached $296 billion in 2024, up from $282 billion in 2023, an extraordinary rise from $11.67 billion in 2000. As volumes grow, so does the urgency for a payments system capable of matching Africa’s expanding economic ties with Beijing.
Financial experts say removing the requirement to route payments through the US dollar, as is common under current systems, could unlock even greater trade potential. The CIPS link is therefore expected to influence more African banks, including those in Uganda, to adopt yuan-based settlement frameworks to stay competitive in the Africa-China corridor.
CIPS was launched in 2015 to clear and settle cross-border payments in the Chinese yuan. It works as both a clearing house and a payment processor, unlike SWIFT, which only transmits secure messaging instructions and relies on other systems for actual settlements.
By mid-2025, CIPS had 174 direct participant banks, many being Chinese, but also subsidiaries of major global lenders such as Citibank, HSBC, and JPMorgan. CIPS also reduces exposure to dollar exchange-rate volatility, trims settlement delays, and significantly lowers costs, critical advantages in a region where remittance fees average 8.5 per cent, the highest globally.
Although CIPS handles fund transfers in yuan, it can also process multiple currencies, including the US dollar, euro, pound sterling, and Japanese yen, while using SWIFT messaging for more than 80 per cent of its international communication.
This makes it interoperable with the existing global system while offering faster settlement where the yuan is used. The expansion of CIPS into African financial systems aligns with China’s broader goal of promoting the yuan as a global trade currency and insulating its financial architecture from potential geopolitical pressures.
A study by Nanyang Technological University notes that CIPS gives China an alternative to SWIFT, especially significant after several Russian banks were cut off from the SWIFT platform in 2022.
With the Global North steadily reducing financial engagement in Africa, China’s CIPS presents not just an alternative but an upgraded infrastructure offering speed, predictability, and lower costs.
China’s growing influence in Africa’s financial landscape is reinforced by its equity stakes in major African institutions, the Industrial and Commercial Bank of China (ICBC) owns 20 per cent of Standard Bank Group, while the Export-Import Bank of China holds at least 6 per cent of Afreximbank.
As Africa-China trade expands, African banks risk losing market share if they fail to integrate with CIPS. Direct yuan clearing will increasingly become a competitive advantage for handling cross-border trade, investment flows, and corporate payments between the two regions.