CHINESE AND AFRICAN BANKS WORK ON REPLACEMENT FOR SWIFT SYSTEM

Chinese banks are increasingly aligning their financial infrastructure with Africa’s broader trade expansion, supporting commerce under China’s zero-tariff policy for 53 African nations, and overlapping with the implementation goals of the African Continental Free Trade Area (AfCFTA).

Major institutions like the Industrial and Commercial Bank of China and Standard Bank (South Africa) are facilitating direct renminbi (yuan) clearing and cross-border payment networks to streamline transactions across the continent, reports the South China Morning Post (SCMP) and the eNCA (South African News Channel).

The ongoing integration features:

• Local Currency Settlements: African lenders and regional hubs are connecting to China’s Cross-Border Interbank Payment System (CIPS) to bypass traditional dollar-based friction.
• Tariff-Free Synergy: China’s zero-tariff market access for African goods pairs with Chinese bank-backed trade finance for localized industrial parks and export processing.
• Investment and Supply Chains: Policy banks like the China Eximbank provide targeted trade finance that helps integrate African production into Beijing’s manufacturing and supply corridors.

“Following talks in Beijing between Central Bank of Libya Governor Naji Issa and People’s Bank of China Governor Pan Gongsheng last month, the country’s banks are set to join China’s Cross-Border Interbank Payment System (CIPS), an alternative to the Society for Worldwide Interbank Financial Telecommunication (Swift) system,” noted the SCMP.

“The move will facilitate direct yuan interbank payments for trade. According to the state-run Libyan News Agency, joining the network will streamline commercial transactions, accelerate cross-border transfers and boost trade flows. Libya also plans to tap into China’s capital market by issuing panda bonds—yuan-denominated debt sold by foreign entities in mainland China—which could help fund the country’s reconstruction following years of conflict.”

Banks or countries that are either linking up with the CIPS or involved in currency swaps include Banco de Fomento Angola, Ethiopia, Kenya, Mozambique, Nigeria, South Africa, and Zambia.