Ghana Opens a Cedi-to-Yuan Trade Route as Direct China Settlement Expands

Ghanaian businesses importing from China can now initiate eligible payments from Ghana-cedi accounts without first sourcing US dollars, as a new banking arrangement begins to create a more direct route between the cedi and Chinese yuan for bilateral trade.

Bank of Ghana Governor Dr Johnson Pandit Asiama said Stanbic Bank Ghana is piloting the arrangement, while GCB Bank is preparing a similar service. The development builds on Stanbic’s earlier rollout of access to China’s Cross-Border Interbank Payment System, or CIPS, following approval from the central bank.

The distinction is important: Chinese suppliers are not being paid in Ghana cedis. Ghanaian importers can fund eligible transactions from cedi accounts, while the banking system handles conversion and settlement to beneficiaries in renminbi.

Reducing the dollar step

For many African importers, trade with China has traditionally involved first obtaining US dollars before the transaction is ultimately settled with a Chinese counterparty. That adds another currency to the transaction and can increase exposure to dollar availability, correspondent-banking processes and foreign-exchange costs.

Under the arrangement described by the Bank of Ghana governor, an eligible importer can initiate the payment from a cedi account and have the Chinese beneficiary settled in yuan, removing the requirement for the customer to source dollars first.

Asiama said at the Bank of Ghana’s 132nd Monetary Policy Committee press briefing that the central bank was taking payment-system developments seriously as trade with China expands.

CIPS provides the settlement rail

Stanbic Bank Ghana became the first bank in Ghana to offer clients direct access to CIPS in August. The system is China’s cross-border renminbi clearing and settlement infrastructure and is authorised by the People’s Bank of China.

Stanbic describes its CIPS service as providing a more direct route for yuan-denominated payments to China, with eligible transactions capable of next-business-day settlement when documentation is received within the required cut-off.

The new cedi-funded arrangement extends the significance of that infrastructure for Ghanaian businesses. It moves the service from a mechanism for settling yuan payments towards a practical way for importers to reduce their dependence on acquiring dollars before paying Chinese suppliers.

What it could mean for Ghana-China trade

China is one of Ghana’s largest sources of imports, making the payment corridor economically significant. If the service expands beyond its current pilot and more banks participate, some Ghana-China trade could be conducted with less direct demand from importers for US dollars.

That does not mean Ghana has abandoned the dollar, nor that the cedi itself is being cleared through CIPS. The underlying international settlement remains in renminbi. The change is at the customer end: the Ghanaian business can initiate the transaction using local currency rather than independently sourcing dollars as an intermediate step.

The arrangement also forms part of a wider African shift towards alternative cross-border payment rails. African institutions are expanding local-currency settlement through systems such as PAPSS, while Chinese banks and their African partners are extending renminbi settlement infrastructure as China-Africa trade grows.

From pilot to broader banking service

The next test will be scale. GCB’s planned entry would broaden the service beyond Stanbic, but the eventual impact on foreign-exchange demand, transaction costs and settlement times will depend on adoption by businesses, pricing, liquidity and the number of banks able to offer the route.

For now, the development provides Ghanaian importers with something more concrete than a policy proposal: an operational banking route through which eligible China payments can begin in cedis and end in yuan.

Sources: MyJoyOnline — Bank of Ghana Governor on cedi-funded China payments; Stanbic Bank Ghana CIPS rollout; Bank of Ghana foreign-exchange market data.