Key takeaways
Powered by lumidawealth.com
- African companies are increasing exploration of renminbi and local-currency trade settlements amid US tariff policy volatility.
- US-Africa trade ($83.4B in 2025) remains far smaller than Africa-China trade (~$315B), reinforcing China’s growing currency influence.
- Uncertainty around the African Growth and Opportunity Act (AGOA) renewal adds pressure on exporters and manufacturers.
- Boosting intra-Africa trade and value addition is seen as a structural hedge against geopolitical and currency risk.
What Happened?
Ecobank CEO Jeremy Awori said volatile US tariff policy is accelerating efforts across Africa to reduce reliance on the US dollar in trade settlements. Companies are increasingly considering direct renminbi-to-African currency conversions and greater use of local currencies for intra-continental trade. While Africa’s trade with the US reached $83.4 billion in 2025, it remains significantly smaller than its estimated $315 billion trade relationship with China. At the same time, uncertainty surrounding the renewal and review structure of AGOA has created additional export risk for African manufacturers.
Why It Matters?
This reflects a gradual but potentially meaningful de-dollarization shift driven less by ideology and more by risk management. Tariff unpredictability and trade policy uncertainty raise transaction costs and settlement risk for African corporates reliant on the dollar. As China remains Africa’s dominant trading partner, renminbi settlement becomes economically rational, particularly if supported by swap lines or bilateral agreements. Over time, greater local-currency settlement could reduce dollar liquidity demand, reshape FX reserve allocation patterns, and deepen regional financial integration. For investors, this has implications for African FX markets, sovereign funding structures, and long-term demand for dollar-denominated assets.
What’s Next?
Watch for expanded currency swap agreements, increased renminbi clearing infrastructure in African financial centers, and policy measures aimed at boosting intra-African trade under the African Continental Free Trade Area framework. Progress in reducing non-tariff barriers and improving regional logistics will determine whether local-currency trade scales meaningfully. If US trade policy volatility persists, diversification away from the dollar in trade settlement could accelerate, influencing currency flows and cross-border capital dynamics across emerging markets.
