The world is undergoing a fundamental rebalancing in the architecture of global finance. While the United States dollar (USD) remains dominant in terms of reserves, invoicing, and trade settlement, its unchallenged status is no longer guaranteed. What we are witnessing is not a collapse of dollar dominance, but the emergence of a gradual and sustained dilution of its exclusivity. For African banks, the implications are profound—not only for liquidity management and capital flows, but for broader sovereignty over monetary and trade policy. The continent must prepare for a more fragmented, more digital, and more multipolar global currency regime.
In 2025, the USD still accounts for approximately 57.8% of global foreign exchange reserves according to the IMF’s latest COFER statistics. However, this figure has been steadily declining from over 70% at the turn of the century. Simultaneously, the share of trade settled in dollars is slipping across several bilateral corridors, particularly those involving BRICS economies. Brazil and China now settle more than 40% of their bilateral trade in renminbi (RMB). The recent Saudi-China oil contracts denominated in RMB mark a symbolic break from the historical petrodollar system. India and Russia have established rupee-rouble energy settlements. Central banks from Asia to Latin America are actively adjusting reserve portfolios to include a wider mix of currencies, precious metals, and digital assets.
These developments are not coincidental—they are strategic. They reflect a shift in geopolitical alignment, a desire to hedge against the extraterritorial risks posed by US monetary and sanctions policy, and a recognition that technology now allows for alternative settlement systems to bypass traditional dollar-based infrastructures such as SWIFT. BRICS Pay, the digital currency-focused mBridge project, and regional initiatives such as the Pan-African Payment and Settlement System (PAPSS) are part of a broader movement to create resilient and sovereign financial channels that are less vulnerable to third-party disruption.
For African banks, these trends present an urgent challenge. Many institutions remain heavily dollarised in their exposure—whether through trade finance pipelines, nostro accounts, interbank lines, or reserve allocations. This over-concentration creates asymmetric vulnerability. When the Federal Reserve tightens interest rates, capital flows reverse sharply from frontier markets. When US banking channels are disrupted, African banks can face sudden liquidity gaps. During the 2022–2023 cycle, for example, tightening by the Fed contributed to a 12–18% depreciation in several African currencies, placing pressure on debt service and import cover. Even institutions with sound balance sheets found themselves scrambling to manage FX mismatches.
Yet the problem is not merely cyclical. It is structural. The African banking sector needs to proactively reduce its single-currency dependence and embrace a currency strategy that reflects the new financial geography. This does not mean abandoning the dollar. Rather, it means building a diversified, risk-aware, and strategically agile approach to currency exposure—one that anchors in the dollar but extends operational capability across multiple systems.
The African Continental Free Trade Area (AfCFTA) represents a foundational enabler in this transition. With 54 signatory countries and a combined GDP of over US$3.4 trillion, AfCFTA has the potential to not only boost intra-African trade—still hovering around a modest 18%—but to localise settlement processes and reduce dependence on external currencies. The rollout of the Pan-African Payment and Settlement System, developed by Afreximbank and the African Union, is a critical step toward enabling real-time settlement in local currencies across the continent.
However, infrastructure alone is not enough. Banks must build institutional capacity to operate effectively in a multi-currency ecosystem. This begins with treasury policy. Institutions should review their FX risk frameworks to identify overexposures, align internal transfer pricing to reflect cost of capital in non-USD currencies, and invest in real-time FX monitoring tools. Products such as non-deliverable forwards (NDFs), synthetic currency swaps, and structured cross-currency derivatives must become standard offerings for clients operating in sectors like agriculture, mining, and infrastructure—sectors where foreign-currency revenues or input costs are material.
Operationally, correspondent banking relationships need to be diversified beyond traditional hubs like London and New York. Relationships with financial centres in Johannesburg, Dubai, Shanghai, and São Paulo are increasingly vital. Equally, banks must invest in APIs and back-end integration with regional digital settlement networks, ensuring they are PAPSS-compliant and capable of interfacing with the next wave of central bank digital currencies (CBDCs), which are likely to become part of regional clearing mechanisms.
Importantly, this is not simply a technical exercise. It is a strategic imperative. The rise of BRICS+—which now includes Egypt, Saudi Arabia, UAE, Ethiopia, and others—brings with it the very real possibility of an alternative commodity pricing and reserve currency framework. A digital settlement unit backed by a basket of member currencies or commodities may not unseat the dollar entirely, but it could become the standard for a growing share of global South-South trade. With BRICS now accounting for more than 30% of Africa’s external trade, African banks must not be passive observers of this evolution. They must engage, innovate, and embed themselves within these new frameworks.
Governance must also evolve. Currency risk and geopolitical exposure must be discussed not just in treasury departments, but at board level. Financial institutions should form internal scenario modelling teams to assess the impacts of future USD liquidity shocks, BRICS currency realignment, or a partial reorientation of African trade toward RMB or digital settlement layers. These assessments should directly inform capital allocation, product strategy, and regional expansion planning.
Furthermore, the regulatory ecosystem must adapt. Prudential guidelines should incentivise FX risk diversification. Regional bodies such as the African Monetary Cooperation Programme and African Securities Exchanges Association must harmonise rules to enable smoother currency clearing, collateral management, and hedging market development across borders. A pan-African credit rating ecosystem would also allow for improved benchmarking and risk-adjusted pricing in local currency instruments—further reducing external dependence.
What lies ahead is not a binary outcome where the dollar either dominates or disappears. The more probable scenario is one of currency pluralism—where several regional currencies coexist for trade, reserves, and settlement, often mediated by digital infrastructure. In this environment, the African banking sector must not only survive but lead. The time to act is now.
We cannot wait for external systems to collapse before building our own resilience. Nor can we afford to treat multi-currency capability as a peripheral function. It is now central to institutional competitiveness, macroeconomic stability, and regional integration. By aligning AfCFTA implementation with a coherent de-dollarisation strategy, Africa’s financial institutions can reduce systemic risk, support trade expansion, and assert greater control over the levers of their financial future.
The reality is this: monetary sovereignty is not just the domain of central banks. It is a function of institutional foresight. If African banks do not adapt to the realities of 2025 and beyond, we risk being systemically marginalised in a world that is rapidly reshaping its monetary backbone. The dollar is no longer the only bridge in global trade—and we must ensure we have multiple crossing points for Africa’s journey forward.
Written by Edward U. Mashingaidze who is an Independent Non-Executive Director at CBZ Holdings. He has over 30 years of executive leadership experience across Africa, Europe, and Asia in the energy, mining, and processing sectors. He holds an MBA and Master of Research from the University of Liverpool (UK), and a BCom in Economics from the University of South Africa. He is currently completing a Doctor of Business Administration (DBA). He writes in a personal capacity.
