Standard Bank plugs into China’s payment system

In November, Standard Bank became the first African bank to integrate directly with China’s Cross-Border Interbank Payment System (CIPS).

It means the bank can send and receive money to and from China much faster, allowing businesses to save money, which is great for trade, says Mandira Bagwandeen, an NSI research affiliate.

"It, in a way, bypasses the dollar-based SWIFT system that has traditionally dominated global transactions,” says Bagwandeen.

Previously, a transaction underwent two conversions, which took time and increased costs.

The integration eliminates that.

"It almost creates this super highway for trade with China."

The move signals a strategic shift in Africa’s financial landscape, says Bagwandeen in her recent Business Day article.

"With Standard Bank operating in more than 20 African countries, it really does provide a sovereign alternative to the Western-dominated financial transaction infrastructure."

Other African countries, including Kenya, Ethiopia, and Zambia, have already begun using RMB for debt repayments and taxes.

Moreover, by moving away from dollar-linked repayments, governments reduce exposure to US interest rate hikes and currency volatility, explains Bagwandeen

And not only that, for the Continent, it could mean a financial future that’s less one-sided.

"The dream, really, is to have a Pan-African payment system where we can trade with different African currencies."

To listen to Bagwandeen in conversation with CapeTalk's Clarence Ford, use the audio player below: