The Central Bank of Kenya (CBK) is considering setting the Chinese yuan (renminbi or RMB) as its reserve currency. With China holding well over half of Kenya’s bilateral debts, the decision to anchor Kenya’s currency to the renminbi was described by CBK governor Patrick Njoroge as ‘inevitable’. A member of the Macroeconomic and Financial Management Institute of Eastern and Southern Africa added that, "Most countries in the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) region have loans or grants from China and it would only make economic sense to repay in renminbi".
By the end of the 20th Century, the United States Dollar was the dominant international currency, with over 70% Currency Composition of Foreign Exchange Reserves (COFER), enabling US citizens to borrow at lower rates and dictate much of geopolitics.
Does this ‘inevitable’ adoption of the renminbi as reserve currency for Kenya signal that the other African nations holding Chinese debt will do the same? If this happens, could we see other non-African nations do the same, precipitating a significant increase in of China’s approximately 1.2% CNY COFER compared to the United State’s approximately 62% COFER? What might the social, environmental, and political ramifications of a China-anchored Africa be for both Africans and the rest of the world?