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African Banks Consider Chinese Yuan, But Risks Loom (Voice of America)

June 30, 2018

More than a dozen African countries have been weighing the merits of adding the Chinese yuan to their mix of foreign reserves, discussing the idea at a gathering of officials last month in Harare, Zimbabwe.

Adopting the yuan, also known as the renminbi, or RMB, would make it easier for African countries to pay back loans to China.

But it could also increase reliance on an economic and development partner that’s come under increasing scrutiny for the conditions it places on deals with African partners.

...

Multibillion-dollar loans to fund Chinese infrastructure projects tied to the Belt and Road Initiative represent sizable portions of some African economies. In Djibouti, for instance, infrastructure loans from China equal 75 percent of GDP, according to the Center for Global Development.

Repaying those loans might not be straightforward.

Read the full article here.

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Photo of Scott Morris
Senior Fellow, Director of the US Development Policy Initiative