A significant recalibration is underway in African trade finance.. Companies across the continent now have the practical ability to settle transactions with Chinese suppliers directly in Renminbi (RMB), potentially breaking a long-held reliance 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 dynamics of procurement, settlement, and pricing between African buyers and Chinese sellers..
For decades, settling in USD has been the unchallenged norm.. African importers routinely absorbed double currency conversions, local currency into dollars and dollars into yuan, along with volatility risk, banking fees, and elongated settlement timelines.. RMB settlement eliminates an entire layer of friction..
Payments clear directly in China, and the financial architecture begins to reflect the reality of modern African supply chains, which are deeply integrated into Chinese manufacturing ecosystems.
Why this matters now
Africa’s import relationship with China is no longer opportunistic, it is entrenched.. From mining equipment and automotive components to infrastructure materials, electronics and retail products, Chinese-origin goods underpin numerous African value chains..
Aligning payment rails with sourcing hubs accelerates competitiveness.. As RMB settlement gains traction, three advantages become immediately clear:
Cost reduction – Removing USD from the settlement loop eliminates conversion fees and reduces supplier hedging premiums.. Chinese exporters who receive RMB avoid the need to maintain USD buffers, creating room for sharper pricing.. The benefit is not ideological, it is arithmetic..
Speed and predictability – CIPS processes transactions in hours rather than days.. Fewer correspondent banks mean fewer compliance pauses, fewer SWIFT dependencies, and less working-capital drag.. Predictable cash flow has always been a differentiator for African SMEs; RMB settlement strengthens that advantage..
Strategic optionality – Currency dependency is a form of vulnerability.. The ability to transact outside USD channels is not a rejection of the dollar, it is a hedge against volatility, sanctions exposure, rate cycles, and external liquidity constraints.. Optionality is no longer a luxury, it is operational resilience..
The BRICS layer
It is tempting to frame this shift as a BRICS-led assault on the dollar.. That narrative is tidy, but inaccurate.. BRICS has not delivered a competing reserve currency, nor has it replaced the dollar in global clearing systems.. What BRICS has done is dismantle the taboo around non-USD trade..
When leaders from the bloc discuss local-currency settlements, they do not redefine global finance; they normalise the idea that settlement can occur without passing through Washington’s monetary plumbing..
That intellectual permission matters.. It creates an environment where African banks adopting RMB rails are no longer viewed as outliers but as pragmatists responding to commercial logic..
The RMB shift in Africa does not exist because BRICS demanded it.. It exists because African businesses are tired of paying transactional premiums for the privilege of using a currency that neither originates their goods nor reflects their primary trading partner.. BRICS may have opened the door mentally, but economics pushed Africa through it..
Tempered realism and challenges ahead
This development, however, is not a friction-free transition. Several constraints remain:
Limited RMB market depth – The yuan is not yet a fully globalised currency.. Liquidity, hedging instruments, and historical pricing data are still developing compared to USD markets.. Treasury functions across Africa will require time to adapt..
Regulatory alignment – Central banks, customs authorities, and documentation frameworks are built on USD assumptions.. RMB adoption will require new policies, reserve structures, and guidance to prevent operational bottlenecks..
Supplier variability – Not every Chinese exporter will embrace RMB invoicing immediately.. Legacy systems, pricing model,s and USD-based hedging preferences will slow uniform adoption..
Where is this heading..??
In the immediate term, RMB will coexist with USD.. In the medium term, RMB settlement becomes a competitive lever for African firms with regular China exposure and currency-sensitive procurement timelines..
In the longer term, if liquidity deepens and African banks expand RMB support, the continent could see a genuine structural shift, not because the dollar collapsed, but because it stopped being the only tool available..
“With China being Africa’s largest export market, the new payment system will simplify and accelerate the clearance of transactions between the two markets,” Standard Bank said on its website when announcing the launch..
According to Standard Bank’s Trade Barometer 2024, 34% of surveyed businesses source their imports from China in contrast to 23% of the businesses surveyed in May 2023..
The question has already evolved.. It is no longer whether African businesses can settle in RMB.. It is whether they understand the strategic implications well enough to use that option earlier, better, and faster than their competitors..
Conclusion
Africa’s RMB settlement story is not a subplot in someone else’s geopolitical contest.. It is a pragmatic adjustment to the geography of supply chains.. The dollar will remain dominant, but it will no longer be lonely..
RMB is the first credible alternative with real utility for African procurement realities..
Whether other currencies within or beyond BRICS eventually follow this pathway will depend on whether they can match that utility, because without real transactional value, no currency, regardless of political enthusiasm or bloc alignment, can meaningfully challenge the dollar’s entrenched role in global trade..
