Kenya Converts Chinese Loans from Dollar to Yuan Denomination

 Kenya's Sharp Daily published on 30 January 2026 an article titled "Kenya's Shift to Yuan-Denominated Debt: Economic Strategy, Risks, and Regional Momentum" by Ryan Macharia.

Kenya has converted three dollar-denominated loans with the Export-Import Bank of China into yuan, a restructuring expected to reduce annual debt servicing costs to China by $215 million annually.  Yuan-denominated interest rates are lower than their dollar counterparts, easing pressure on Kenya's public finances and reducing exposure to US interest rate cycles.

The International Monetary Fund cautions, however, that while currency conversion can reduce near-term costs, it also introduces exposure to Chinese currency fluctuations, which may pose new currency risks if not matched with sufficient yuan revenue streams or hedge strategies.  

China Moves Deeper into African Banking

 Uganda's The Observer published on 5 December 2025 an article titled "China's Payment System Gains Ground in Africa as Afrexim, Standard Join In."

Afreximbank, Africa's multilateral trade bank, became the first major African institution to join China's Cross-Border Interbank Payment System (CIPS), enabling direct and cheaper yuan transactions.  Standard Bank Group, the continent's largest lender, followed suit.  CIPS gives China an alternative to the Western world's SWIFT. 

The Industrial and Commercial Bank of China (ICBC) owns 20 percent of the Standard Bank Group while the Export-Import Bank of China holds at least 6 percent of Afreximbank.   

China Expands Its Currency in Africa

 The Diplomat published on 3 November 2025 an analysis titled "Debt Relief as Currency Strategy: China's Renminbi Push in Africa" by Monique Taylor.

Kenya has converted part of its Chinese loans from U.S. dollars into renminbi (RMB), while Ethiopia is negotiating a similar arrangement.  This allows the borrowing country to reduce its debt servicing costs and permits China to turn debt distress into a strategic opening to expand the RMB's international use.

The Future of China's RMB in Africa

The Institute for Security Studies (ISS) published on 13 August 2018 a commentary titled "Can China Free Africa from Dependency on the Mighty Dollar?" by Peter Fabricius, ISS consultant.

Only 3 to 5 percent of all global foreign exchange transactions are now in China's RMB and about 75 percent are in dollars. The RMB will become a much more important currency in trade and foreign reserves. While Chinese currency swaps will help African and other countries reduce their dependencies on the dollar, they will not end them.

Nigeria Begins Using China's Yuan As Reserve Currency

Quartz Africa published on 2 August 2018 an article titled "Nigeria Has Taken Its First Steps in Adopting China's Yuan As a Reserve Currency" by Yomi Kazeem.

Nigeria has begun selling Chinese yuan to local traders and businesses as an alternative trading currency in order to avoid the hassle of first converting to US dollars.