Seventeen top central bank and government officials from 14 countries in eastern and southern Africa are meeting in Harare, Zimbabwe to discuss the possible use of China's yuan as a regional reserve currency, Xinhua News Agency reported May 28, citing a statement from the Macroeconomic and Financial Management Institute of Eastern and Southern Africa, or MEFMI.
African Development Bank officials are also expected to join the talks, which will address the weakening external positions of most member countries following an economic slowdown.
"Most countries in the MEFMI region have loans or grants from China and it would only make economic sense to repay in renminbi (Chinese yuan)," Xinhua cited MEFMI spokesperson Gladys Siwela-Jadagu as saying.
"This is the reason why it is critical for policy makers to strategize on progress that the continent has made to embrace the Chinese yuan which has become what may be termed 'common currency' in trade with Africa," she added.
Siwela-Jadagu noted that official reserves for most countries in the MEFMI region stood "barely at or below" the traditional three months of import cover benchmark as at end-2017. Swelling appetite for infrastructure projects has also led to a rise in foreign-currency-denominated public debt.
Africa cannot afford to fail to take advantage of opportunities with China, Siwel-Jadagu said, given the limited trade and investment with the West over the past five years.
MEFMI members include Angola, Botswana, Burundi, Kenya, Lesotho, Malawi, Mozambique, Namibia, Rwanda, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
In January, EU central banks said they were considering adding yuan to their foreign-currency reserves.
As of May 28, US$1 was equivalent to 6.40 Chinese yuan.
