Zambia has become the first African country to formally accept China’s yuan for the payment of mining taxes and royalties, a move that underscores Beijing’s growing financial influence in the continent’s most strategic resource sectors.
The Bank of Zambia (BoZ) has confirmed that payments in renminbi began in October, marking a significant shift in how Africa’s second-largest copper producer manages revenue from its mining industry. The development reflects both changing global trade dynamics and Zambia’s evolving relationship with China.
According to a Bloomberg report, Chinese mining companies operating in Zambia are now settling part of their tax obligations in yuan. This change mirrors China’s status as Zambia’s largest buyer of copper and one of its biggest creditors, making the use of its currency increasingly practical.
The central bank said the decision aligns with its reserve management strategy and the realities of Zambia’s export markets. A BoZ representative explained that a substantial share of Zambia’s copper exports are destined for China, and that Chinese mining firms already receive most, if not all, of their export payments in renminbi.
“The Bank of Zambia’s main objective is to diversify and grow its reserves, and acquiring renminbi helps us achieve that goal,” the official said.
Beyond reserve diversification, the BoZ noted that holding yuan would also reduce the cost of servicing Chinese debt. By matching the currency of its obligations with its reserves, Zambia expects to repay its loans to China more economically and with less exposure to exchange rate risks.
China’s mining money and Africa’s currency shift
Zambia’s move comes amid a broader push by China to internationalize the yuan, with Africa emerging as a key testing ground for this long-term strategy. As Chinese investment and lending expand across the continent, so too does the use of its currency in trade, debt, and now taxation.
Business Insider Africa reported in October that Kenya had converted part of its Chinese debt into yuan in an effort to ease pressure on its strained public finances. The move is expected to save Kenya approximately $250 million annually after restructuring a $5 billion railway loan from the Export-Import Bank of China into yuan-denominated debt.
Ethiopia has also opened talks on adopting a similar approach, while Zambia itself has previously indicated that it would consider restructuring some of its Chinese debt into yuan.
To facilitate the new payment system, the Bank of Zambia last month began publishing an official renminbi-to-kwacha exchange rate. This allows mining companies the option of selling either US dollars or yuan to the central bank when settling their tax obligations.
The framework builds on regulations introduced in 2018 and expanded in 2020, which required mining companies to sell foreign currency earnings to the central bank. Those measures were aimed at strengthening Zambia’s depleted foreign reserves during the height of its debt crisis.
The acceptance of yuan payments marks a notable evolution of those policies. It signals that China’s dominance in Africa’s mining sector is now being complemented by the growing presence of its currency, reshaping not only trade and investment flows but also the financial architecture of resource-rich economies like Zambia.
