LUANDA, July 22 – Banco de Fomento Angola (BFA) plans to become the first Angolan lender to join China’s Cross-Border Interbank Payment System (CIPS), as demand for direct settlements in the Chinese yuan continues to grow alongside expanding trade and investment links between the two countries.
According to Reuters, citing a source at Angola’s second-largest commercial bank said that the lender expects to complete its integration into the payment network by next year, enabling clients to settle transactions directly in yuan without relying on intermediary currencies.
According to the source, “We have realised, through our clients, that financial flows with China will have to switch to the CIPS system.” The source added, “If we remain on the sidelines, we may even lose this relationship with our Chinese clients.”
China remains one of Angola’s most important economic partners, purchasing a significant share of the country’s crude oil exports while providing billions of dollars in financing for infrastructure and development projects.
The decision comes as African financial institutions increasingly strengthen their yuan settlement capabilities amid Beijing’s efforts to internationalise its currency and reduce reliance on the US dollar in cross-border trade.
Earlier this month, the National Bank of Angola added the Chinese yuan to the list of currencies commercial banks can use to meet their hard currency reserve requirements, granting it the same status as the US dollar, euro and South African rand.
The policy shift was followed by comments from Dorivaldo Teixeira, head of debt management at Angola’s Ministry of Finance, who said the government is developing plans to raise yuan-denominated debt to take advantage of lower borrowing costs.
The banking source said these policy developments reinforced BFA’s decision to join CIPS, while broader geopolitical and trade trends have also accelerated demand for yuan-based transactions.
According to the source, “Previously, we did not see any demand for yuan from suppliers or customers in China, as they preferred to hold U.S. dollars.” The source added that “These changes are linked to the direction of international trade, shifts in the geopolitical landscape and new trends.”
BFA’s planned membership follows a broader shift across the continent. Standard Bank of South Africa became the first African bank to connect to the CIPS network in November and, last month, received authorisation alongside the Industrial and Commercial Bank of China (ICBC) to provide yuan clearing services across Africa.
The growing adoption of yuan settlement infrastructure highlights the increasing financial integration between African economies and China, as banks and governments seek to facilitate trade, diversify financing sources and reduce transaction costs in cross-border commerce.
