Welcome to AfricanPod, and in this episode, we look at the relentless march of China towards global supremacy, this time with a newly-empowered arsenal – its currency, the Yuan, also called Renminbi.

It is a big topic because the International Monetary Fund has now recognised the Yuan as a Global Reserve Currency. Africa, on the other hand retains the top medal in mediocrity, at least when it comes to currency, finance and economics.

So its Hello Africa, here comes China! And the question is do African leaders even understand what has just happened? Find out, right here on the AfricanPod – the good news and the bad news about Africa.

On the last day of November 2015, the International Monetary Fund made an earth-shattering announcement: China’s currency, the Yuan has been approved to join the elite group of global reserve currencies.

This means, China will be in a position to activate the same leverage the United States and its paper currency, the Dollar has enjoyed for about four decades.

Other currencies that enjoy reserve status include the Swiss Francs, the Euro, British Pounds Sterling, the Japanese Yen, the Australian Dollar and the Canadian Dollar.

It is important to point that the United States Dollar takes the Lion’s share – the Leviathan’s share of the privilege that comes with being the source of global reserve currency, with more than 60% of World Trade settled in US Dollars.

So what privilege comes with being a global reserve currency?

It is not a question asked very often, and the answer is very rare. Even where you hear the it is often only as clear as mud, because it is presented in economic and financial jargons that barely one in a million people understand.

So let’s attempt to get some clarity:

A reserve currency is used in international transactions – or paying for goods and services around the globe. This means, the person or persons who print that currency have enormous financial advantage, because they can purchase goods and services cheaply. They can access funds cheaply. The cost of getting goods and services for the one who prints the currency is exactly what it costs to print the paper.

Since the world operates on exchange of goods and services – a situation described as trade, the one who gets the cheapest money on the scale of printing in exchange for goods and services is the one who laughs all the way to be bank.

If you had a choice which one will you choose – the ability to print money and exchange it for whatever you want or sweat all day long for what you need?

Don’t get this wrong – it is very complicated, but the above is the simplest way to put it in order to begin to understand the advanced circus that the global monetary system is.

The International Monetary Fund presides over the system and allows some to print paper in exchange for very valuable goods and services.

It also allows the same people to print what is called money, lend it and collect interest on it. Imagine collecting dividends on something that costs you almost nothing to print.

It is the sweetest deal on planet Earth, and it takes the smartest and the most powerful people to own the process the keeps it in the hands of the few.

Invariably, this means Africans are not among the smartest and the most powerful people as far as economics and finance is concerned.

Africans, in this sense are deeply ignorant of the mechanisms that result in the creation of currency – or what is erroneously called money.

It explains why no African currency forms part of the global reserve currency. Perhaps, at a basic level, it is the reason why the continent has no common currency like the Euro. Remember the Euro? Once invented, it quickly found its place on the global reserve currency.

China understood the game of currencies and worked very hard to be admitted...