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Pan-African banking group Ecobank has entered advanced discussions with Bank of China to launch a direct local-currency-to-yuan settlement product for its customers by the end of 2026, a move that signals a strategic shift away from the United States dollar in Africa-China trade flows. The proposed framework, announced by Ecobank Group CEO Jeremy Awori on Monday, would allow African businesses to settle cross-border transactions directly in Chinese yuan without first converting to dollars, a process that has long added layers of cost, complexity, and currency risk. Awori told Reuters that the initiative is driven by rising trade and commercial ties between Africa and China, as well as growing frustration among small and medium-sized enterprises over the inefficiencies of dollar intermediation. “We are looking at opportunities for us to settle with, instead of going through the dollar, we do it directly with the Chinese yuan,” Awori said from Nairobi. He added that many African SMEs are looking to China for growth, but lack the right tools and payment mechanisms to do so efficiently. “You need the right tools and payment mechanisms to be able to do that. We’re investing in those.”
The proposed yuan settlement platform would represent a significant evolution in Africa’s financial infrastructure, potentially lowering transaction costs, reducing exposure to dollar volatility, and accelerating payment cycles for thousands of businesses across the continent. African importers and exporters have long complained that the requirement to convert local currencies into dollars before paying Chinese suppliers erodes profit margins and creates unnecessary friction. A direct yuan settlement mechanism would bypass that step entirely, allowing businesses in both regions to transact in the Chinese currency at competitive rates. For Ecobank, which operates in 35 sub-Saharan African countries, the partnership with Bank of China aligns with a broader strategy to reinforce the Asia-Africa payments and trade corridors. The bank is also expanding its China office to capitalise on these opportunities, though Awori declined to provide specific details on hiring numbers or investment levels.
The announcement builds on a Memorandum of Understanding signed between Ecobank and Bank of China (Mauritius) Limited on December 22, 2025, which renewed and deepened a partnership first established in 2010. That agreement committed both institutions to greater collaboration in trade finance, cross-border payments, and Renminbi-denominated solutions for African corporates, Chinese enterprises, and cross-border traders. Under that framework, the banks agreed to share knowledge and technical expertise related to banking operations and financial sector developments, and to explore opportunities for jointly structuring syndicated loans for projects involving Chinese stakeholders in African markets. Jeremy Awori, commenting on that earlier agreement, said the renewed partnership reflected the growing importance of China-Africa commerce and the need for reliable financial infrastructure to support it. “China-Africa economic ties continue to expand, and our customers on both sides rely on efficient and transparent financial solutions,” Awori said. “This renewed partnership with Bank of China will help deliver concrete results in trade finance, payments and Renminbi capabilities.”
The push toward yuan settlement in Africa is not happening in isolation. It is part of a broader continental trend driven by multiple factors: the rising cost and volatility of dollar-based transactions, China’s aggressive campaign to internationalise its currency, and a growing recognition among African policymakers that currency diversification can enhance economic resilience. South Africa’s Standard Bank was authorised in November to process transactions through China’s Cross-Border Interbank Payment System (CIPS), making the yuan the underpinning settlement currency for its clients. Kenya has converted some dollar-denominated Chinese railway loans into yuan, and Zambia has become the first African country to accept yuan for mining taxes and royalties. China is also expanding zero trade tariffs this year for the 53 African nations it has diplomatic relations with, further incentivising the shift. The timing is critical: Chinese exports to Africa rose by 25.8 percent to $225 billion, significantly outpacing the 5.4 percent increase in African exports to China, which climbed to $123 billion, underscoring the growing scale of Africa-China commerce.
Industry analysts have greeted the Ecobank-Bank of China negotiations with cautious optimism, noting that while the potential benefits are significant, the operational challenges should not be underestimated. Regulatory alignment across multiple African jurisdictions, liquidity management, and the convertibility of local African currencies into yuan will be critical to the success of any direct settlement system. Additionally, while yuan settlement may reduce transaction costs, it does not eliminate currency risk entirely; African businesses will still need to manage exchange rate fluctuations between their local currencies and the yuan. However, proponents argue that a direct settlement mechanism could, over time, reduce the blended cost of capital and shorten payment cycles, improving returns for businesses on both sides. The availability of expanding RMB clearing bank networks across Africa, including Bank of China’s own RMB clearing operations in Zambia and Mauritius, provides the technological and policy rails to support such a transition.
Awori emphasised that the growing scale of Chinese investment across sectors such as energy, mining, oil and gas is driving demand for more efficient settlement solutions. “When you look at all the natural resources that exist on the continent, especially in energy, mining, oil and gas, China has also got a lot of interest and investments,” he said. The Ecobank CEO also noted that his institution is investing “significant” amounts in automation this year to support the development of the necessary payment infrastructure. The proposed yuan settlement product is expected to be launched by year-end, pending final negotiations between the two banks. While no formal agreement has yet been signed, the advanced stage of discussions suggests that both parties are committed to operationalising the framework. For African businesses, the promise of direct yuan settlement represents more than just a financial convenience. It is a potential turning point in the continent’s long struggle to free itself from the constraints of dollar-dominated trade finance.
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