CHINESE YUAN, IMF AND AFRICA.

As Nigeria marked its 56th independence anniversary on October 1, the Chinese were also celebrating emergence of a different kind.

Their national currency, Yuan, was finally admitted by the International Monetary Fund (IMF) basket of currencies its loans to countries can be packaged in.

The IMF itself has its own currency of sorts called Special Drawing Rights (SDR) but it is not legal tender in any nation not is it part of the international currencies used for settlements.

However, being one of the currencies in SDR valuation basket confers some status and actually implies that such a currency can be used for international trade settlement.

Yuan joined the United States Dollar, European union Euro, Japanese Yen and British Pound in the SDR basket.

To the Chinese, this was clear recognition of China's growing economic influence since the emergence of China amongst the world's top ten economies.

In the West though, the feat of Yuan was symbolic since the world of finance and its turning wheel moves on without any notice of the SDR. More so, because the view obtains that the Yuan was admitted into the elite basket without meeting all of IMF conditions especially the caveat on free trading in such a currency.

However, the story is different here in Africa where China has gained strong economic links in recent years and very many African countries either now bank of China to modernise rail network or now import mobile phones, TV sets, generating sets and others from China.

Thus, for Africa IMF nod for Yuan came at the right time. Before it some countries were already fashioning ways to link their currencies to the Yuan to cut off other currencies from the link.

South Africa, for example, had by June this year signed agreement for direct trading of the Rand and Yuan in China's inter bank foreign exchange market. It does became the 13th currency to be so traded.

Nigeria is also in the final stages of currency swap deal with China to help reduce Nigeria's demand for the US dollar.

Kenya, according to reports, is even already planning towards hosting the first Yuan clearing house in Africa ahead of bigger economies like South Africa, Nigeria and Egypt.

No harm except that China soon has to find a way to import more from Africa and concede real technical know how transfer especially as most African countries follow the Ethiopian example of opting for Chinese electric rail technology.

Nigeria for example could do with more patronage for its crude oil as world depends more and more on renewable energy.

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