African banks deepen yuan ties as CIPS network grows

Africa is emerging as a central arena for China's push to internationalize the yuan, as financial institutions across the continent deepen their integration with Beijing's payment infrastructure amid record bilateral trade flows.

Libya Joins the Network

Libya became the latest African country to commit to China's Cross-Border Interbank Payment System (CIPS) after Central Bank of Libya Governor Naji Mohammed Issa and People's Bank of China Governor Pan Gongsheng agreed in July to connect Libyan commercial banks to the network. The move will enable direct yuan interbank payments for trade, streamline cross-border transfers, and reduce reliance on the US dollar, according to a statement from Libya's central bank. Libya also plans to issue panda bonds — yuan-denominated debt sold by foreign entities in mainland China — to help finance the country's post-conflict reconstruction.scmp+2

The agreement included provisions for letters of credit to be opened directly through Chinese banks and a planned visit to Beijing by Libyan banking officials.wionews

Record Trade Fuels Yuan Demand

The expansion of CIPS in Africa comes as China-Africa trade reached a record 1.41 trillion yuan in the first half of 2026, the highest level for that period in history, according to Chinese Foreign Ministry spokesperson Lin Jian. The surge followed Beijing's implementation in May of zero-tariff treatment on imports from all 53 African countries with which it has diplomatic relations, driving a 23.5 percent year-on-year increase in Chinese imports from Africa in May and June. Reuters reported in June that the tariff removals were expected to boost yuan-denominated settlements.globaltimes+1

South Africa's Standard Bank ↗ 0.00%, 20 percent owned by the Industrial and Commercial Bank of China, announced on July 27 that it had processed 8 billion yuan — roughly $1.2 billion — through CIPS since late last year. The bank has been authorized by the People's Bank of China to clear yuan across 19 African nations. In Angola, Banco de Fomento Angola is preparing to become the first Angolan bank to join CIPS.slguardian+3

Beyond Payments

Zambia began collecting taxes and royalties from Chinese mining firms in yuan in January, channeling the currency back to Beijing to fund imports and service loans. Kenya converted its railway debt to yuan last year, while Ethiopia and Mozambique are negotiating similar restructurings.scmp+1

"By expanding CIPS and yuan-denominated transactions, China seeks to reduce reliance on the US dollar in international trade and create an alternative payment infrastructure," said Kai Xue, a Beijing-based corporate lawyer, as quoted by the South China Morning Post. Charlie Robertson, an economist focused on Africa, noted that "as China is Africa's biggest trading partner, this would make the yuan more important than the US dollar".slguardian+1