Announced yesterday, 29 December 2025, Ecobank Group’s memorandum with Bank of China (Mauritius) follows Standard Bank’s integration with China’s Cross-Border Interbank Payment System in November. 

Both initiatives aim to reduce settlement delays and currency conversion costs for businesses trading between the regions – a practical response to China’s position as Africa’s largest trading partner for 16 consecutive years, as bilateral trade between the two regions nears $315 billion annually. 

Africa’s annual trade finance gap stands at $120 billion. Bank-intermediated finance supports just 25-40% of goods trade across most of the continent – well below the 60-80% typical in developed markets. 

Chinese lending to Africa peaked in 2016 at $28.5 billion and has since declined to under $1billion in new commitments by 2022, reflecting Beijing’s economic slowdown and debt sustainability concerns. African countries owe China approximately $134 billion, with three of its top ten borrowers – Zambia, Ghana, and Ethiopia – having defaulted in recent years.

Trade finance initiatives targeting small and medium enterprises face additional hurdles: weak credit assessment infrastructure, currency volatility, and stringent anti-money laundering requirements that make African banks less attractive correspondent partners. 

Banks cite insufficient collateral and high perceived risk as reasons for rejecting over 20% of trade finance applications, even though default rates on trade finance remain lower than other lending categories.

The African Continental Free Trade Area (AfCFTA) aims to boost intra-African trade, which currently represents just 15% of the continent’s exports compared to 60% in Asia. Banking partnerships expanding renminbi settlement capabilities offer improvements.