Ecobank Seeks Yuan Link to Trim Dollar Dominance in Africa Trade
Pan-African lender Ecobank Transnational Inc. is actively exploring methods to facilitate direct yuan payments for clients trading with China, aiming to reduce dependence on the US dollar. The bank intends to integrate with China’s Cross-Border Interbank Payment System (CIPS), allowing African businesses to hold yuan and settle imports directly. This move addresses current inefficiencies where traders must convert local currencies to dollars and then to yuan, a process that increases costs, creates trade friction, and exposes economies to foreign-exchange volatility and dollar shortages. Ecobank CEO Jeremy Awori highlighted the benefits of diversification for both businesses and central banks to protect against currency depreciation swings. This initiative follows Standard Bank Group Ltd., which recently became the first regional lender to connect directly to CIPS. The shift reflects a broader strategic trend among African governments and financial institutions to diversify away from dollar-denominated trade as economic ties with Beijing, the continent’s primary trading partner for over 15 years, continue to intensify.
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