For decades, Africa’s traders have demanded US dollars or, more recently, euros when closing a deal; now China’s yuan is being adopted across the continent by businesses and banks to settle debts, raise loans and pay for imports and exports. Until recently, few people in Africa would have been able to name China’s currency.
This has changed with stunning speed over the past few years, boosted by the 2008 global crisis when the ability to borrow dollars by importers and exporters was substantially reduced. For China too, dependent on exports, the US and Eurozone liquidity crunch was an alarming event. As a result, it also quietly encouraged trading partners to settle more of their bills in yuan.
Few regions embraced this approach more enthusiastically than Africa.