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Kenya to host first yuan clearing house in Africa

yuan

Kenya wants to host a clearing house for China’s yuan currency – a bold African first that would deepen the continent’s ties with Beijing, already a big investor from The Cape to Cairo.

Such a venture would not eclipse the dollar in Africa anytime soon, however, because the yuan is tightly managed and traders are wedded to the greenback’s flexibility.

Africans can already get quotes for their currencies against the yuan . A clearing house would cut the need for dollar settlements, speed things up and reduce costs.

yuanBut the real prize for Kenya, or any other African host, would be the symbolism of being the continent’s business gateway with Asia’s economic emperor, even if business starts modestly.

Such an exchange would also be the first outside Asia.

Its prospect is a measure of China’s challenge to Africa’s traditional partners in Europe and the United States and reflects the increasing attractions of a continent with some of the world’s fastest growing economies.

“Even if the benefits to business have probably been slightly overblown by diplomats on both sides, I don’t think you can understate the symbolic aspect,” said Shilan Khan, Africa economist at London-based Capital Economics.

China’s ties with Africa have expanded fast.

In 2012, the total volume of China-Africa trade reached $198.49 billion, a rise of 19 percent over the previous year, Chinese government figures show. China accounted for 18.1 percent of Africa’s total trade volume in 2012, up from 3.8 percent in 2000.

“The proposal is basically to consider Kenya favourably given that the financial market is deep here,” Kenyan Finance Minister Henry Rotich told Reuters in August, citing rivals such as Nigeria, which already holds some reserves in yuan.

South Africa had a financial centre that dwarfs Kenya’s and has been mooted as a potential host, though officials there have not said they are pursuing such a plan.

“We are sort of competing and at the end of the day, the Chinese government is the one to decide where this clearing house will be,” Rotich said, making his pitch for east Africa’s biggest economy which aims to become a financial hub.

Early signals look good for Kenya.

“We are very positive about this clearing house and I think it is very important for Kenya to set up a financial hub here and to process the Chinese currency renminbi,” China’s ambassador to Kenya, Liu Guangyuan, told Reuters on the sidelines of a conference in Nairobi on Wednesday.

The value of potential business through such a clearing house was still a subject of discussion, he said.

Kenya’s daily turnover of foreign exchange is $330 million to $370 million, sometimes rising to $500 million.

Highlighting Nairobi’s enthusiasm for a clearing house based in Kenya’s central bank, President Uhuru Kenyatta made his bid for Beijing’s backing during a visit to China in August.

Business between Kenya and China is growing, even if Europe is still a bigger trade partner. Kenya’s Equity Bank, for example, has opened a branch in Nairobi for Chinese business executives, complete with Chinese tellers serving them.

“Everyone is trying to clinch a deal to directly clear and settle yuan transaction with the People’s Bank of China,” said an official at a Chinese state think-tank that often advises Beijing on policy, speaking about Africa’s clearing house plans.

In the meantime government officials in Niger have reportedly found evidence of bloated costs in oil deals with China National Petroleum Corporation (CNPC), leading the government to seek renegotiations on sections of
its contracts with CNPC. In Chad, CNPC operations have been suspended due to alleged “gross environmental negligence”, reports The New York Times.
Gabon, in another controversial move, will also be reclaiming Sinopec assets in 2015, because of breaches of contract, according to Macau- Daily Times

In August Chad’s oil minister Djerassem Le Bemadjiel told state radio that the Chadian government had “found flagrant violations of environmental standards by […] CNPC.

Not only do they not have facilities to clean spilled crude, there were also intentional spillages in order
reduce costs”, reported Reuters.
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  • C101

    Kenya to host first yuan clearing house in Africa. Two days after reporting this all hell breaks loose as Anglo-Americon mercenaries attack a shopping mall in Nairobi. Did I mention that I don’t believe in coincidences.

  • hvaiallverden

    When there are Mercs from a range of lands, some have becomed extreme, by large of actions since the WW2 endd by the western forces, the same that is running this False flag, cue Bono, as they sayed even in acient rome, uh, the Romerome.

    The Mercs have No problems comitting crimes so hearrising despecable, that to kill inocents in a mall, is just a walk in the park, for creatures like the Mercs.
    The patten that emrges is stunning, all from the Saudi threat to start terror in the Caucasus region, to this one, thrue the Syrian backfiring with fake videos to once again, fake causes and fake executers, and never, ever truths the Officiale Bollocs.

    And with the reasent dicslousure of the facts that the so caled victims of the Gass atac, dont show up in the MSM and thats for a “good” reason, No trace of Gass what so ever and specaly Sarin, the cause of the exposing of this fake videos, all military officers knows this as well as I do, ask them to verify the writings I have done above, no Gass at all.
    Its all a lie, the episode never happened, its a Staged video.

    This is a bold move from the Kenyan state, and I hope the Africans awakens to the insanly vicious policy of the uSSa/NATO/Israel, thure their patsyes, like Egypt, and various Puppets in the North eastern parts of Afica.
    The lands is your Africans, never forgett that.

    peace