African countries accelerate shift away from the U.S. dollar in regional trade

Thursday 06 August 2026 - 17:28

By: Azzat Manal

African countries accelerate shift away from the U.S. dollar in regional trade

A growing number of African countries are accelerating efforts to reduce their dependence on the U.S. dollar by expanding the use of local currencies and the Chinese yuan in trade and financial transactions. The trend reflects a broader strategy to strengthen monetary independence, lower transaction costs, and improve regional economic integration.

Several African economies have introduced new financial arrangements aimed at increasing the use of alternative currencies. Countries including Egypt, Nigeria, and South Africa have expanded currency cooperation with China, while Kenya has taken steps to diversify part of its external financing, seeking to reduce exposure to exchange rate fluctuations and borrowing costs.

The increasing use of the Chinese yuan has been particularly noticeable in cross-border settlements. As trade between China and African nations continues to grow, businesses and financial institutions are relying more frequently on the Chinese currency for commercial transactions, reflecting Beijing's expanding economic influence across the continent.

At the same time, African governments are promoting the use of their own national currencies in domestic and regional trade. One of the most significant initiatives supporting this objective is the Pan-African Payment and Settlement System (PAPSS), which enables businesses and banks to settle transactions directly in local currencies without depending on the U.S. dollar as an intermediary.

Zambia has emerged as one of the leading examples of this transition by encouraging wider use of its national currency for domestic transactions while also expanding the use of the yuan in sectors linked to Chinese investment, particularly mining. Such measures are intended to facilitate trade, improve financial stability, and reduce foreign exchange risks.

Despite the growing momentum, economists note that moving away from the dollar remains a gradual and complex process. Many companies continue to face additional costs related to currency conversion, while the dollar remains the dominant global reserve and trading currency. Nevertheless, the increasing adoption of alternative payment systems and local currencies signals a broader shift in Africa's financial landscape as governments seek greater economic resilience and more diversified international partnerships.