Guides and tips

    January 26, 2024

    How to pay Chinese suppliers from Africa

    African businesses are gradually taking part in international trade within the global economy. However, a significant challenge they face is how to transfer funds from Africa to China seamlessly.

    Since the 1990s, China has been Africa's biggest trading partner, from Nigeria, South Africa, and Egypt to Congo, Kenya, and many others. Recent studies reveal that Asia constitutes over 40% of Africa's exports and imports. Given Africa's status as an emerging market, many African businesses have established strong trade ties with Chinese suppliers to supply manufactured goods to meet the demands of their customers.

    Nevertheless, sending money to China from Africa has proven complex, with many businesses still searching for a streamlined payment method.

    How to pay Chinese suppliers from Africa

    Klasha Wire: Poised to simplify cross-border payment to and from Africa, Klasha provides a seamless payment solution for African businesses with suppliers or business partners in China through the  Klasha Business account.

    With a unique feature known as international money transfer, Klasha Wire enables businesses in Nigeria, South Africa, and other African countries to pay Chinese suppliers seamlessly using their local African currencies and money methods.

    On the other hand, the supplier receives the payment within 1-3 business days directly into his business account in his preferred currency without owning a Klasha Business Account.

    To use Klasha Wire, you have to create a Klasha Business Account and wire funds seamlessly while enjoying other business features. Klasha is PCI DSS compliant, which means you enjoy the highest level of security for your transactions.

    Klasha Payment Links: This is a no-code solution for seamlessly accepting payments from Africa, even without a website. With Klasha Payment Link, Chinese merchants can easily collect payments from their African customers by sharing a personalized payment link via various digital communication channels such as WeChat, WhatsApp, Instagram, email, and others. The payment link allows the African customer to make payments in their preferred currency, while the Chinese merchant receives the equivalent amount in any chosen currency.

    Klasha Pay-ins: This is an online payment gateway designed to seamlessly integrate into websites or e-commerce stores to facilitate collections in African currencies. Once integrated into the website, Chinese merchants can easily collect payments from their African business associates. Pay-ins allow African customers to make payments in their local currencies and preferred payment methods, while the merchants receive the equivalent in USD, GBP, or any other currency of their choice.

    Bank Wire transfers: Bank wire transfers are the widely known traditional method for international transactions. It involves transferring funds directly from one bank account to another. While this method is straightforward, it's often associated with potential delays and fees associated with intermediary banks. Bearing that the buyer pays all the costs and currency conversion costs can also impact the final amount the Chinese supplier receives.

    While paying Chinese suppliers is crucial, receiving payment from their clients can be challenging for African exporters. In today's global marketplace, competing against foreign rivals necessitates merchants to provide customers with attractive sales terms and seamless payment options. The primary objective of every transaction is to ensure complete and timely payment.

    Here are some methods for African exporters to receive payment:

    How to receive payment from China to Africa

    Whether you are a Chinese expatriate in Africa or an exporter with business partners and associates in China, receiving payments from China to Africa has now been simplified.

    1. Klasha Payouts: Payout facilitates Chinese merchants and customers disbursing funds to their African counterparts in multiple African currencies. This entails making payments in Chinese yuan, with the recipient receiving the equivalent amount in their preferred African currency directly to their bank account or mobile money wallet within a few days.

    2. International bank transfer: This involves sending money through transfer agents. While these establishments do not have direct outlets in Mainland China, they can be accessed through banks like the Bank of China. Using either of the services will require some supporting documents and service charges.

    Pay Chinese suppliers easily with a Klasha Business account

    Klasha Business offers a streamlined solution for facilitating payments to Chinese suppliers. Whether you're an African customer looking to transfer funds to your Chinese suppliers or a Chinese supplier aiming to receive payments from your African clients, the Klasha Business Account ensures a seamless and hassle-free experience.

    With swift and transparent processes, including competitive exchange rates and clear transaction fees, our cross-border payment solution prioritizes speed and security.

    Create a Klasha Business account to pay your Chinese Suppliers or speak to our sales team.

    China-Africa economic relations

    The economic ties between China and Africa have witnessed significant growth, evidenced by China's substantial investment in development projects throughout the continent and the notable presence of Chinese enterprises operating in Africa. 

    The surge in commodity prices, coupled with China's initiatives to enhance imports from Africa, led to an impressive 11% growth in trade, reaching a total of $282 billion in 2022. According to Chinese customs authorities, China's exports to Africa amounted to $164.49 billion, while imports from Africa reached $117.51 billion.

    Nigeria is Africa's largest importer from China, with South Africa being the primary exporter to the continent. Following closely in export volumes are Angola and the Democratic Republic of the Congo. Historically, Chinese exports to Africa comprised light industrial products, food, chemicals, native produce, and animal by-products. 

    However, since 2000, there has been a pivotal shift, with machinery, automobiles, and electronic items becoming crucial components of exports. There has also been a notable improvement in product quality and technology compared to earlier years.

    The proportion of machinery and electronic products accounts for more than half of China's exports to Africa. Africa's major export products to China used to be cotton and phosphate, among other primary products. In recent years, steel, copper, and chemical fertilizers produced in Africa have successively entered China's market. In addition, Africa's export of agricultural products to China has been increasing rapidly. 

    Local specialties, such as Egyptian oranges, South African wine, Ghanaian cocoa beans, Ugandan coffee, Tunisian olive oil, and Ethiopian sesame, have gained popularity among Chinese consumers. Sub-Saharan Africa exports to China are dominated by natural resources, constituting 90% of the trade. At the same time, diversification is evident in imports from China, with higher levels of machinery, electronics, and manufactured products.

    Economists surveyed by Reuters project China's economy to grow by 4.9% this year, a significant increase from the reported 3% in 2022. China has implemented measures to balance trade, allowing dozens of African nations to export certain goods duty-free. This new policy encompasses over 8,800 commodities, with China aiming to boost African imports to $300 billion by 2025.

    In the contemporary landscape, African businesses seek the best way to send money directly to China, bypassing third-party intermediaries. Simultaneously, Chinese immigrants are also consistently exploring avenues for remitting funds back to their home country.

    Paying Chinese suppliers requires an understanding of available payment options. Each method comes with its own set of advantages and drawbacks.