African borrowers are quietly diversifying away from Chinese lending
Kenya and Ghana went to the IMF and European investors over Chinese interest rates. Egypt added Gulf sovereign funds. India and Turkey are competing on terms. The renminbi infrastructure kept building anyway.
Two things are happening in African finance at once, and they point in opposite directions. China is steadily building renminbi settlement infrastructure across the continent. Meanwhile several of its closest borrowers are shopping elsewhere.
The renminbi architecture is substantial
Clearing. Bank of China's Johannesburg branch became Africa's first renminbi clearing bank, with a network now spanning 15 African countries and regions. Direct CIPS participants in Africa reached six by early 2024, with 52 indirect participants. South Africa, Nigeria and Kenya have included the renminbi in foreign exchange reserves.
Swap lines. Local currency swap agreements with South Africa, Egypt, Morocco, Nigeria and others total over ¥100 billion.
Offshore market. Bank of China issued Africa's first offshore renminbi bond in 2017, with offshore trading promoted in South Africa and Mauritius.
North Africa specifically. Egypt and Morocco have swap agreements and hold renminbi in reserves. The National Bank of Egypt has a Shanghai branch conducting renminbi business.
Trade and lending. China–Africa trade reached $282.1 billion in 2023, with renminbi settlement share rising. Angola's oil trade and Zambia's mineral purchases have both been settled in renminbi. Egypt issued a ¥3.5 billion panda bond for infrastructure.
The incentives are practical rather than ideological: direct renminbi settlement through partnerships like ICBC with Standard Bank removes dollar conversion cost, African banks with Chinese branches can obtain renminbi licences enabling trade finance, and FOCAC provides the policy scaffolding.
And the borrowers are diversifying
This is the part that gets less attention.
Kenya and Ghana, facing high interest rates on Chinese loans, have turned to the IMF and European investors for cheaper financing.
Egypt continues receiving Chinese investment while strengthening cooperation with UAE and Saudi sovereign wealth funds to spread financing risk.
India and Turkey are competing directly, offering lower rates and technology transfer — particularly in the digital economy.
That is a competitive market functioning normally. African governments borrowing from whoever offers better terms is not a geopolitical realignment; it is what borrowers do. But it undercuts the assumption that Chinese lending creates one-way dependency, and it means Chinese finance is now priced against alternatives.
How China handles distress
The record is mixed and conditional rather than either predatory or generous.
Bilateral negotiation to extend repayment is the norm — Angola's national oil company secured liquidity through an accounts receivable pledge loan. China has participated in the G20 Debt Service Suspension Initiative, though restructuring in cases like Zambia moved slowly, hampered by the difficulty of coordinating a large and varied creditor group.
Three factors determine treatment:
Political relationship. Countries with close strategic ties — Ethiopia, Kenya — receive more flexible arrangements.
Project economics. Infrastructure debt is often linked to project revenue, as with the Mombasa-Nairobi Railway.
External narrative. Western characterisation of debt-trap diplomacy has itself shaped how some countries approach negotiations.
The last is worth noting: the framing has become a factor in the outcomes, independent of whether it accurately describes the lending.
What this means if you are on the European side
European lenders are winning business on price, and could win more. Kenya and Ghana moved toward European and multilateral finance because Chinese rates were high. That is a competitive opening created by pricing, and it is available to anyone who shows up with better terms — no strategic argument required.
The competition is no longer bilateral. India, Turkey and Gulf sovereign funds are all bidding. European development finance positioning itself as the alternative to China is competing in a field of five, and the differentiator increasingly offered elsewhere is technology transfer rather than rate.
Renminbi settlement infrastructure will outlast any particular loan book. Clearing banks, CIPS participation, swap lines and licensing arrangements are durable plumbing. Even as borrowing diversifies, the settlement rails remain — and they were built while everyone was arguing about debt.
The two trends are not contradictory. China is losing some lending business on price while embedding financial infrastructure that does not depend on winning it.