Business
Kenya looking to host Africa’s first yuan clearing house – to cut need for dollar settlements
In 2012, the total volume of China-Africa trade reached US$200 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 favorably given that the financial market is deep here,” Kenyan Finance Minister Henry Rotich told reporters in August, citing rivals such as Nigeria, which already holds some reserves in yuan.
South Africa has a financial center 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, ultimately the Chinese will 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.
“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 reporters 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 US$330 million to US$370 million, sometimes rising to US$500 million.
