African banks adopt Chinese CIPS system for Renminbi settlements

African financial institutions are increasingly adopting China’s Cross-Border Interbank Payment System (CIPS) to facilitate direct Renminbi settlements, aiming to reduce transaction costs and complexity in trade with China.

In Zambia, Stanbic Bank Zambia has launched the CIPS system to help businesses bypass multiple currency conversions and intermediary charges. Zambian officials noted that direct settlement could deepen investment in sectors such as mining, manufacturing, and infrastructure by providing greater pricing certainty and improved cash flow for importers and exporters.

In East and Central Africa, Bank of Kigali has become the first bank in the region to join CIPS. This allows the Rwandan bank to settle transactions directly in yuan, avoiding the need to convert local currency into US dollars before converting to Renminbi. This move follows a trend of growing trade volumes between Africa and China and follows similar participation by Standard Bank of South Africa.