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China’s efforts to elevate the yuan as a global currency are finding fertile ground in Africa, where surging trade, growing lending relationships and new payment infrastructure are steadily increasing the use of the Chinese currency across the continent.
The push comes as China seeks to build alternatives to Western-dominated financial systems and reduce dependence on the US dollar in international trade and finance.
China-Africa trade rose nearly 18 per cent last year, according to Chinese customs data, while Beijing’s decision in May to eliminate tariffs on imports from 53 African countries is expected to further boost trade flows and increase settlements in yuan.
The trend is already visible across sectors ranging from agriculture and manufacturing to infrastructure financing. Chinese ports are receiving growing volumes of African exports, including Kenyan avocado oil, Nigerian cattle bone pellets and South African apples, creating fresh demand for transactions settled directly between the yuan and local African currencies.
Economists say Africa is increasingly becoming a testing ground for Beijing’s broader ambition to internationalise the yuan.
Research by the International Monetary Fund has shown that countries with greater trade exposure to China tend to increase their use of the Chinese currency. Beijing reinforced that strategy this week by unveiling additional measures aimed at promoting the yuan’s global use.
Beyond trade: Debt strengthens yuan’s role
Trade is not the only channel through which the yuan is gaining influence.
China remains the largest bilateral creditor for several African nations, including Kenya, Ethiopia and Senegal. That position is helping encourage greater use of the Chinese currency in debt servicing and government finance.
Kenya last year converted three Chinese-funded railway construction loans from dollars into yuan, a move expected to reduce annual interest costs by approximately $215 million.
Meanwhile, Zambia announced in late 2025 that it would begin accepting mining royalties and taxes from Chinese companies in yuan, partly to strengthen foreign exchange reserves and facilitate repayments to Chinese creditors.
Analysts say such developments create a self-reinforcing cycle: as countries borrow, trade and transact more with China, demand for yuan-denominated financial products naturally rises.
The African Export-Import Bank estimates that China now accounts for about 20 per cent of Africa’s external trade, up from roughly 5 per cent two decades ago.
Dollar still dominant
Despite the momentum, most economists believe the yuan remains a long way from challenging the dollar’s supremacy.
The US currency continues to dominate global trade, foreign exchange reserves and international capital markets, benefiting from deep liquidity and decades of institutional trust.
Nevertheless, Beijing’s progress in Africa highlights how China is pursuing a gradual strategy of expanding the yuan’s international role through trade links, infrastructure financing and payment networks rather than seeking a direct confrontation with the dollar.
That strategy appears to be gaining traction.
Kenya’s avocado exports to China, for example, have grown from around 10-20 containers a week in 2022 to nearly 200 today. Industry executives project shipments could reach 1,000 containers a week by 2030, potentially matching volumes sent to Europe.
For Beijing, such developments offer a glimpse of how trade corridors can gradually evolve into currency corridors — bringing the yuan one step closer to its long-term ambition of becoming a truly global currency.
With inputs from agencies.
