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The China Development Bank (CDB) and the Development Bank of Southern Africa (DBSA) have signed a 2.1 billion yuan (approximately 5.21 billion Rand or $290 million) loan agreement, marking the first time a Chinese yuan-denominated financing deal has been extended to an African institution.
Announced by Global Times on July 9, the agreement underscores China’s growing influence in Africa’s economic landscape and its strategic push to internationalize the yuan. The funds will support a range of projects across infrastructure, energy, information and communications, water and sanitation, and manufacturing, signaling a new era of Sino-African cooperation.
This year alone, Yantai Port recorded a record 2.858 million tons of exports to over 20 African countries, a staggering 80.7% increase year-on-year. This growth aligns with the loan’s objectives, as the port’s efficiency and capacity are set to play a pivotal role in delivering goods and services tied to the financed projects.
This deal comes amid a broader context of China’s Belt and Road Initiative (BRI), which has seen its financing to Africa soar from 24.8 billion Rand in 2010 to over 161 billion Rand by mid-2024, according to World Bank estimates (converted at the same 2.479 rate). The yuan-denominated loan reduces Africa’s reliance on dollar-based debt, where interest rates have averaged 5-7% higher than yuan loans, offering a cost-effective alternative.
Boitumelo Mosako, CEO of DBSA, emphasized the partnership’s potential, stating, “Both sides will jointly promote sustainable infrastructure financing to bring a brighter future to Africa.” This aligns with China-Africa 10 partnership plans, which prioritize green development and economic resilience.
The timing of the agreement is significant, coinciding with preparations for the 2025 BRICS summit, where yuan internationalization is a key agenda item. The International Monetary Fund (IMF) reports a 65% increase in yuan-based trade settlements since 2020, reflecting growing global confidence in the currency. For Africa, this shift could mitigate the continent’s 372 billion Rand financing shortfall for entrepreneurs, as noted in a 2012 Forbes analysis (converted at 2.479), potentially catalyzing a multiplier effect on local economies.
However, the deal has sparked debate. While it promises infrastructure boosts—such as power generation and water systems—it raises concerns about debt sustainability, a critique often leveled at BRI projects. Environmental groups also call for adherence to green financing guidelines, given the ecological risks of large-scale developments. China’s Green Finance and Development Center at Fudan University reported in May 2025 that BRI investments are increasingly aligning with sustainable goals, a trend this loan could reinforce.
As Yantai Port’s cranes hoist containers bound for African shores, this 5.21 billion Rand pact symbolizes not just economic ties but a geopolitical realignment, challenging Western dominance in African development finance. The world watches as China and Southern Africa chart a course for mutual prosperity.
Please Note:The exchange rate of 2.479 ZAR per CNY is based on the most recent data from the provided web results (Wise, updated early July 2025). This rate is subject to fluctuation, and the actual value in ZAR may vary slightly depending on real-time market conditions as on July 10, 2025.
