China’s recent tariff removals on African goods and a sharp increase in bilateral trade are pushing more African nations to settle transactions in yuan, a trend that chips away at the dollar’s decades-long grip on global commerce and finance.
The tariff moves
Beijing has eliminated import duties on a number of agricultural and raw-material products from several African countries. The move lowers costs for Chinese buyers and makes African exports more competitive. In return, those African nations have been more willing to accept payment in yuan rather than insisting on dollars. The tariff changes took effect earlier this year, covering items like cocoa, coffee, and minerals that are key exports for many African economies.
Trade surge behind the switch
Total trade between China and Africa reached a record high in recent months, with China now Africa’s largest trading partner. The growing volume gives African central banks and companies a practical reason to hold and use yuan. They no longer have to convert to dollars first, saving on fees and currency risk. The shift is most visible in resource-rich nations that sell oil, copper, and cobalt to China. Some have started pricing those commodities in yuan directly.
Yuan’s growing role in Africa
Several African countries have added the yuan to their foreign-exchange reserves in the past year. A few have signed swap agreements with the People’s Bank of China to ensure they have enough yuan on hand for trade. Chinese banks are expanding their presence in African financial hubs, offering yuan-denominated loans and trade-finance products. The trend is still small compared to the dollar’s share, but it’s accelerating. Central bankers in the region are watching each other’s moves—once one major economy shifts, others often follow.
The dollar has been the default currency for cross-border trade and central bank reserves for decades. But the yuan’s advance in Africa represents a concrete challenge. If even a fraction of Africa’s trade with China shifts away from the dollar, it reduces global demand for U.S. currency and could pressure the dollar’s value over time. Policymakers in Washington are aware of the trend. So far, they’ve focused on maintaining dollar liquidity and encouraging allies to keep using the greenback. But the changes in Africa are happening at a local level, trade by trade, not through any grand plan.
The question now is how fast the yuan can gain ground. China’s willingness to keep tariffs low and its appetite for African resources will play a big role. So will the stability of the yuan itself. Currency controls and occasional devaluation have made some African traders cautious. Still, the direction is clear. More African imports are being invoiced in yuan, and more African banks are offering yuan accounts. The shift is real, even if it’s gradual.
