BRICS nations are accelerating de-dollarisation, reducing reliance on the US dollar in global trade and finance. This push for a new financial architecture, promoting local currencies and alternative payment systems, was spurred by the Ukraine conflict and Western sanctions. For example, over 80% of Russia-China trade in 2023 bypassed the dollar, using yuan and ruble. Launched in 2024, the BRICS Bridge Payment System offers an alternative to SWIFT, facilitating cross-border transactions in local currencies. By mid-2025, pilot testing was underway between China, Russia, and India, with South Africa and Egypt recently joining. This emerging system raises the question of whether it can free Africa from its long-standing reliance on the dollar.
The dollar’s costing Africa
Africa’s financial susceptibility to the US dollar is deeply rooted in both its structure and history. Over 60% of the continent’s external debt is denominated in US dollars. In 2024, African nations spent an estimated $70 billion on debt servicing, a figure significantly inflated by rising US interest rates and a strong dollar, according to the African Development Bank. This substantial financial strain diverts crucial funds from vital sectors such as development, education, and healthcare.
Furthermore, dollar dependency exacerbates external vulnerabilities, as evidenced by trade imbalances. Nigeria, Africa’s largest oil producer, consistently struggles with dollar shortages, currency devaluations, and inflation. This is because while its oil exports are priced in dollars, the majority of its imported goods are also dollar-denominated, creating a persistent economic challenge.
BRICS and the promise of monetary sovereignty
African nations may regain monetary sovereignty through the de-dollarisation agenda. By trading in local currencies or a BRICS-backed settlement currency, they could mitigate exposure to dollar volatility. With intra-BRICS trade rapidly expanding to $422 billion in 2023, African BRICS members are well-positioned to leverage this transition.
Several nations are increasingly adopting local currency trade to alleviate pressure on their foreign reserves. For example, Egypt entered a $2.5 billion bilateral currency swap agreement with China in late 2024, enabling it to use yuan for Chinese imports and thereby conserve its foreign exchange. Similarly, Ethiopia, grappling with persistent dollar shortages and a trade deficit exceeding $10 billion, is looking into conducting local currency trade with India, a significant exporter of pharmaceuticals and engineering products.
As Africa’s most industrialised economy, South Africa plays a crucial role in BRICS’ financial integration initiatives. Its banking sector is currently testing cross-border settlements through the BRICS Bridge Payment System. By conducting a portion of its trade with China, Russia, and India in currencies other than the dollar, South Africa aims to protect itself from global monetary instability.
A cautious road to financial independence
De-dollarisation alone cannot solve all economic challenges. Many African currencies lack the necessary stability and liquidity for efficient trade, as seen with the persistent inflation and foreign exchange volatility of the Nigerian naira and Ethiopian birr amongst others. True monetary independence will remain elusive until domestic economies are strengthened and confidence in local institutions is re-established. To prevent a new form of dependency, African nations should prioritise diversifying their trade relationships, strengthening regional economic ties, and establishing strong financial governance.
Building regional capacity
BRICS provides African nations with significant leverage, offering them a crucial role in reshaping global financial regulations. To truly achieve liberation, however, African states must seize this opportunity to establish autonomous institutions. The African Continental Free Trade Area (AfCFTA), when integrated with BRICS mechanisms, can foster increased intra-African trade using local currencies. Furthermore, the Pan-African Payment and Settlement System (PAPSS) by the African Export-Import Bank, introduced in 2022, can work in conjunction with BRICS infrastructure to lessen the continent’s reliance on the US dollar.
Uganda and Nigeria are engaging with BRICS-related initiatives, signaling a shift away from dollar-denominated transactions. Uganda, while not a full BRICS member, signed a 2025 memorandum with India to investigate using the rupee for agro-processing imports, which would alleviate pressure on its dollar reserves. Nigeria is exploring membership in the BRICS Bank (NDB), aiming to access non-dollar loans that could finance energy infrastructure and mitigate foreign exchange risks.
Liberation lies in leverage, not replacement
BRICS’ de-dollarisation strategy offers Africa a unique opportunity to redefine its position within the global financial system. It provides mechanisms, alternatives, and partnerships to lessen the dominance of the dollar. However, this strategy alone cannot secure Africa’s financial independence. Achieving this liberation requires robust institutions, prudent macroeconomic policies, and unified regional cooperation.
Instead of merely shifting its allegiance from Washington to Beijing, Africa must assert its independence. While BRICS can provide the framework, Africa itself must undertake the construction.
Written By:
Dr Iqbal Survé
Past chairman of the BRICS Business Council and co-chairman of the BRICS Media Forum and the BRNN
*Sesona Mdlokovana
Associate at BRICS+ Consulting Group
African Specialist
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