A leading pan-African multilateral financial institution is poised to make a significant move into China’s domestic debt market, marking a major milestone in Beijing’s long-term effort to internationalize its currency.
The Africa Finance Corporation (AFC) has confirmed it is planning to issue its inaugural “panda bond”—a yuan-denominated bond sold in mainland China—as early as this year. The move represents a strategic shift for the continent’s top lenders, who are increasingly looking to diversify away from the U.S. dollar to slash borrowing costs and mitigate currency volatility.
In an interview with the South China Morning Post, Banji Fehintola, the AFC’s Executive Director for Financial Services, described the planned foray into Chinese capital markets as a “natural evolution” of the corporation’s strategy.
“Yes, it is on the table for this year,” Fehintola confirmed. “It is one of the things we are considering; we began looking at it last year, and it remains on the table this year as well.”
The announcement follows the AFC’s success in securing a coveted triple-A credit rating in China last year, which has paved the way for deeper financial integration. Fehintola noted that the corporation has already established a strong track record with major Chinese financial heavyweights, including the China Exim Bank, the Industrial and Commercial Bank of China (ICBC), and the Bank of China.
While a precise issuance date has yet to be finalized, Fehintola revealed that the preparatory work is largely complete. Investor roadshows have been concluded and a mandate is in place, allowing the AFC to act “at short notice” once market conditions become favorable. He emphasized that the bond issuance remains “an important part of our funding plan.”
The move by the AFC, a major player in infrastructure development across the continent, underscores a growing trend among African lenders and institutions to embrace the yuan. By tapping into China’s deep capital markets, these institutions can secure funding in a currency that offers greater stability compared to the volatile dollar, while simultaneously supporting Beijing’s broader ambition of establishing the yuan as a true global alternative.
About the Africa Finance Corporation (AFC): The AFC is a multilateral financial institution established to provide pragmatic solutions to Africa’s infrastructure deficit and drive sustainable economic development.
