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Zambia has become the first African country to formally accept China’s Yuan for the payment of mining taxes and royalties, highlighting Beijing’s growing financial influence in the continent’s strategic resource sectors.
Chinese-owned mining companies operating in Zambia have begun settling part of their tax and royalty obligations in Yuan, marking a significant shift in how Africa’s second-largest copper producer manages revenue from its mining industry, according to Business Insider.
The Bank of Zambia has confirmed that payments in renminbi began in October, making Zambia the first country on the continent to officially acknowledge the acceptance of mining-tax payments in the Chinese currency.
Bloomberg reports that the move reflects China’s expanding role in Zambia’s economy, where it is both the largest buyer of copper and one of the country’s biggest creditors.
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The central bank said the decision aligned with Zambia’s export patterns and its broader reserve-management strategy.
“A large portion of copper exports go to China, and Chinese mining firms already receive some, if not all, of their export payments to China in renminbi,” the Bank of Zambia said in a response to emailed questions.
“The Bank of Zambia has diversification and the build-up of reserves as a key objective, and purchasing renminbi enables the bank to actualise this objective,” it added.
The central bank further noted that holding Yuan would help Zambia service its Chinese debt more efficiently, allowing the country “to service its debts to China in a more cost-effective manner.”
Zambia’s decision comes as Africa increasingly becomes a testing ground for China’s long-standing efforts to internationalise its currency.
Several African countries are exploring ways to reduce reliance on the US dollar in trade and debt servicing, particularly where China is a major lender.
In October, Business Insider Africa reported that Kenya converted part of its Chinese debt into Yuan to ease pressure on its strained public finances. The restructuring of a US$5 billion railway loan from the Export-Import Bank of China into Yuan-denominated debt is expected to save Kenya about US$250 million annually.
Ethiopia has also opened discussions on similar arrangements, while Zambia itself had previously indicated it was considering such options.
To support the new system, the Bank of Zambia last month began publishing an official renminbi-Kwacha exchange rate, enabling mining companies to choose whether to sell dollars or Yuan when meeting their tax obligations.
The arrangement builds on regulations introduced in 2018 and expanded in 2020, which require mining firms to sell foreign-currency earnings to the central bank to bolster Zambia’s reserves during its debt crisis.
The acceptance of Yuan payments signals a deepening of China’s footprint in Africa’s mining economy, with its influence now extending beyond trade and financing into the currency systems that underpin the continent’s resource revenues.
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