Africa-based Standard Bank has gained authorisation to offer transactions through China’s CIPS (Cross-Border Interbank Payment System).
The initiative happened at this year’s Lujiazui Forum, where government officials, world financial leaders, and scholars discuss international financial cooperation, contributing to financial reform in China.
The connection between Africa and China
CIPS will allow interbank payments between Africa and China using RMB as the underpinning currency. The access will offer banks and FIs on the continent the ability to clear and settle cross-border payments without using different currencies. This initiative is key as Standard Bank’s Trade Barometer 2024 shows that 34% of businesses source their imports from China, while only 23% of them said so in May 2023. This reflects growing trade between Africa and China, and this new solution strengthens the alliance.
The survey concludes that the continent’s import reliance on China continues, indicating further engagement with the Asian markets. China’s collaboration is key to Africa’s advancement in infrastructure, trade, and resource exploration, with a significant part of the goods sold in Africa being from China. About 16% of African imports are sourced from China, and 20% of African exports are China-bound, according to the study.
Standard Bank Corporate Investment Banking’s representatives mention positive sentiments regarding the move, saying that the bank is the first one in Africa to offer CIPS transactions. This reflects the bank’s commitment to offer modern solutions that add value to its customers. CIPS will contribute to strengthening Africa’s economic potential by fast-tracking advancements in trade, which supports infrastructure development, better regional integration, and efficient capital deployment.
With China being a key part in Africa’s commercial activity, the new payment system will simplify and accelerate the clearance of transactions between the two markets. The bank aims to further focus on its clients’ needs and demands, offering tailored solutions that offer flexibility and are in line with the developing payments landscape.
