Somalia Seeks Easier Trade Payments with China Through CIPS

GOOBJOOG NEWS | BEIJING: Somalia is exploring ways to simplify cross-border payments for local businesses trading with China, following talks between its Trade Minister and officials of China’s Cross-Border Interbank Payment System (CIPS).

Minister of Commerce and Industry Jamal Mohamed Hassan met CIPS Chairman Wang Hongbo to discuss improving how Somali traders send and receive payments for commercial transactions with Chinese partners, including greater use of China’s currency, the yuan.

The discussions focused on potential cooperation to make trade settlements more accessible and efficient for Somali businesses, which rely on international payment channels to import goods and conduct commercial transactions with China.

CIPS, or the Cross-Border Interbank Payment System, is China’s financial infrastructure for clearing and settling cross-border payments in renminbi. Launched in 2015, the system supports payments linked to international trade, investment and other financial transactions. It is designed to provide participating financial institutions with a more streamlined channel for yuan-denominated settlements.

Somalia’s delegation included the country’s ambassador to China, Dr Hodan Osman Abdi, and Deputy Permanent Secretary in the Office of the Prime Minister, Abdirisak Ali Ibrahim, alongside other officials.

The ministry said the engagement forms part of efforts to facilitate trade between Somalia and China and expand opportunities for Somali products to access the Chinese market.

China is an important trading partner for Somalia, particularly as a source of imported goods. Easier payment arrangements could help reduce some of the difficulties businesses face when settling transactions, although any practical benefits will depend on the participation of banks and financial institutions serving Somali traders.