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Chinese yuan gives US dollar a run for its money as African trade embraces other currencies
- With a rising US dollar, many African countries are facing debt repayment woes and so are moving away from using the currency
- Meanwhile, China is continuing to boost the use of the yuan and local currencies in Africa as part of its de-dollarisation bid
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When you land at the Kenneth Kaunda International Airport in Lusaka, one of the billboards welcoming you to the Zambian capital advertises the services of the Bank of China (BOC).
There are not many countries in Africa where the Chinese government-owned financial institution offers fully fledged banking services in yuan, the Chinese currency.
In addition to Zambia, BOC has a branch in Johannesburg, South Africa, as well as a representative office in Kenya’s capital, Nairobi.
But it was in the southern nation of Zambia where BOC established its first African subsidiary, allowing customers to make deposits in and even withdraw Chinese yuan. Branches in both Lusaka and Kitwe, a mining town in the country’s northern Copperbelt region, serve the growing number of Chinese mining firms and immigrants.
Recently, the lender also announced that its Zambian division would help to boost the use of the yuan for trade as part of China’s efforts to promote the Chinese currency in Africa.
BOC vice-president Lin Jingzhen visited Zambia in December. In a meeting with President Hakainde Hichilema, Lin promised to use the lender’s global reach to facilitate economic and trade ties using the Chinese currency – not only with Zambia, but other African nations as well.
“Actually, Bank of China is a local clearing bank and we will earnestly act upon our responsibility and leverage on our role in Zambia to support other African countries to provide holistic products and services related to the yuan and to promote the use of the yuan in bilateral trade and economic activities,” Lin said during his visit to Lusaka.
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