China's New SWIFT Payment Alternative is Taking the African Continent by Storm
Africa is Ditching the Dollar to Increase Trade in Local Currencies.
China has been rolling out a new payment technology in Africa and it’s going to change the entire future of the continent. China is turning to Africa as the launch point for its global payment system, aiming to boost the international use of local currencies and challenge the US dollar’s dominance. This is massive news because just last month, China successfully recruited 53 African nations in a new trade framework that will see African exports enjoy 100% tariff free access to the Chinese market. Never before has a rising power managed to secure the coordinated support of an entire continent in a comprehensive trade plan to reshape global governance. But this new deal goes beyond just governance, it deals with the most important aspect of international trade in currency and the future of the US dollar.
The push factors driving countries away from the U.S. dollar and the pull toward the Chinese yuan are becoming increasingly irresistible. Donald Trump has proven to be wildly unpredictable, waging a trade war with not just his rivals, but with every single country in the world. Africa has been absent from the headlines in this tariff war. However, it’s not because Trump has spared the continent out of goodwill, it’s because he simply doesn’t care. His past remarks make his disregard for African nations abundantly clear, notoriously referring to nations in Africa as “S***hole” countries in his first term. The U.S. has offered virtually nothing in the way of meaningful trade partnership and this is exactly why 53 of 54 African nations have partnered with China for the future.
In a recent meeting in Cairo, the central banks of China and Egypt signed a series of agreements to facilitate trade and investment exclusively using Chinese yuan. And Egypt is far from alone. It joins a growing list of African nations entering yuan-based trade arrangements including South Africa, Nigeria, and Angola. Nigeria alone has a currency swap agreement with China worth the equivalent of 15 billion yuan, allowing the two countries a direct path to exchange goods and completely bypass the US dollar.
Africa is a continent where trade with China is important, but it’s also one where many countries struggle to access currencies like the euro or U.S. dollar. And that’s been a major roadblock to Africa’s development. In today’s global trade system, if an African business wants to sell goods to Europe, it can’t use its local currency. It must first convert into U.S. dollars, and then again into euros. That means double the fees, more delays, and total dependence on foreign banks. And all of this runs through the SWIFT payment network, which is controlled by the U.S. and Europe. And that control gives the West the power to decide which countries can — or can’t — access the global financial system. And this not is just about trade facilitation. In 2022, after Russia advanced into Ukraine, Western countries froze around $300 billion dollars of Russia’s foreign currency reserves held in their banks. That sent a shockwave through the Global South. Because if the U.S. and EU can freeze Russia’s money overnight, what’s stopping them from doing it to any country they disagree with? For many African nations, this was a wake-up call. It exposed just how risky it is to hold reserves in dollars or euros, and how much power the West holds over your economy when you play by their rules.
And this is exactly where China has stepped in. For the first time, there’s a real alternative: the Cross-Border Interbank Payment System, or CIPS. Operated by the People’s Bank of China, CIPS has quickly expanded, especially across the Global South, with some of its largest users now based in Africa. It’s a cornerstone of China’s strategy to internationalize the yuan, reduce reliance on the U.S. dollar, and offer countries a way to escape dollar dominance and avoid U.S. sanctions. As the American saying goes, “If you build it, they will come” and China has built it. Today, CIPS is used by over 4,900 banking institutions in 187 countries and regions. And with Africa’s booming economies, the continent is set to become a major force accelerating the rise of this new financial system.
In June, South Africa’s Standard Bank became the first African bank to enable direct interbank yuan payments with China, completely bypassing the U.S. dollar. South Africa, the “S” in BRICS, joins fellow member Egypt in spearheading de-dollarization efforts on the continent. Their leadership is significant as they represent Africa’s two largest economies. BRICS member Ethiopia and partner Uganda follow as the seventh and thirteenth largest, respectively. Meanwhile, Algeria and Nigeria, Africa’s third and fourth largest economies, have also received invitations to join BRICS. If they accept, BRICS could soon include Africa’s top four economies, marking a major milestone in the continent’s shift away from dollar dependence.
Unlike Western countries that have traditionally approached Africa as a source of raw materials, China engages with individual nations based on their specific development needs by building partnerships designed for mutual benefit. For example, a recent deal struck between Angola and China that will transform the African country via a win-win partnership. China just invested US$350 million dollars into Angolan agriculture in a drive to boost food security. Although Angola has long been a major oil and gas producer, its economy remains dangerously dependent on oil, accounting for around 50% of GDP, over 70% of government revenue, and more than 90% of exports. While the U.S. has played a major role in Angola’s oil industry, the global shift away from fossil fuels has it clear that it’s time for Angola to diversify and China is helping it do exactly that.
In response, Angola has made it a national priority to diversify its economy and reduce its dependence on food imports, which currently account for nearly half of its food consumption. Recognizing this, China has stepped in with significant agricultural investments aimed at making Angola more food self-sufficient. Just last month, two major Chinese state-owned enterprises signed deals worth US$350 million to develop tens of thousands of hectares of farmland. One of the major deals involves Chinese conglomerate CITIC, which pledged to invest US$250 million over five years to develop 100,000 hectares of soybean and corn production. These companies also plan to establish a seed research and testing center to improve yields and attract additional Chinese investment into Angola’s agribusiness sector.
As Africa deepens its commitment to China, the United States appears to be pulling away. Trump has positioned his foreign policy around “America first” which in relation to Africa has meant nothing but tariffs, cuts to foreign aid, and the closure of diplomatic missions. African nations have also been bolstered by global outrage over U.S. support for Israel’s war crimes in Gaza. All of which have damaged America’s image on the continent. In contrast China continues to present itself as a more consistent and reliable development partner to what China describes as US bullying and unilateralism. This has cleared the road for China to distinguish itself as a different kind of global power. While Washington was raising trade barriers, Beijing was opening markets, offering duty-free access to goods from 33 of Africa’s least-developed countries and signing agreements to increase agricultural imports. As a result, China is now viewed more positively in Africa than on any other continent. For decades, African nations were asked to operate within a global system they had no voice in and little benefit from. Now, through yuan-based trade, infrastructure investment, and financial alternatives like CIPS, China is offering African nations a seat at the table.
Africa is the future and I remain incredibly bullish on the continent’s future, especially with China leading the charge. Every day I receive comments and emails from fans of the channel in Africa and so many of our African brothers and sisters comment across our platforms sharing incredible insights into what China has done for their respective countries. If you are interested in learning more about China’s efforts in Africa, we cover them extensively on our Youtube channel. Click below to watch the full video on this story and subscribe to the channel to follow developments coming from the African continent.
Right on, Cyrus. The first not to be afraid to point out the consequences of the 400-year racist and evil treatment of Africans by Judeo-Christian regimes from Europe and America and contrast that with their treatment by China! BRAVO!! This is a huge breakthrough.
CIPS might sound impressive when you repeat talking points, but the reality in Africa is tiny. Out of hundreds of banks on the continent, only six are direct members and about 59 are indirect. Most Africans are still unbanked and local payment systems barely talk to each other. That is not “taking Africa by storm". Seriously, this article reads like a Press Release for CIPS. It makes me wonder if Cyrus has sold his objectivity and is being compensated to push this narrative.