Can China’s Bilateral Currency Swap Agreements Counter the IMF’s Hegemony in Africa?

Part 1 : Lessons for Better African Financial Diversification

Economic research paper series, November 2025

Abstract

This article analyzes the monetary instrument of bilateral currency swap agreements (BCS) and evaluates their potential for financial diversification. We examine the mechanisms of BCS, their advantages and limitations, as well as the conditions for their success, in order to recommend strategies for African policymakers to strengthen the continent’s economic resilience and reduce dependency on hegemonic currencies such as the dollar and the euro.

The article is structured in two parts:

In the first part, we explain how BCS function. Then, we analyze their specific features to better understand the advantages and drawbacks of their use. We also explore the commercial and strategic interests underpinning the conclusion of these agreements, to highlight how African countries can benefit from them.

In the second part, we examine concrete examples of swaps concluded by certain African countries with China. We also analyze the challenges tied to the development of this tool for both China and African countries, and finally propose concrete strategies for African policymakers to consolidate their economic and monetary sovereignty.