A New Chapter in Africa-China Relations As Zambia Adopts Chinese Yuan For Mining Taxes
Natalie Nyathi
In a landmark move, Zambia has become the first African nation to formally accept the Chinese Yuan (CNY), also known as Renminbi (RMB), for the payment of mining taxes and royalties.
This decision, effective since October 2025, signals a deepening of financial ties between Africa and China and highlights China’s growing influence in the continent’s strategic resource sectors.
Zambia’s relationship with China has been steadily growing since Zambia’s independence in 1964. China has been a key partner in Zambia’s economic development, particularly in infrastructure projects. This partnership is built on mutual benefit, with Zambia rich in resources needed to fuel China’s economic ambitions, and China providing investment and expertise. By 2024, trade between the two nations reached $6.681 billion, marking a 26.1% increase year-on-year.
Several factors have driven Zambia’s decision to adopt the Yuan for mining tax payments:
“A large portion of copper exports go to China and the Chinese mining firms already receive some, if not all, of their payments for their exports to China in renminbi,” the Bank of Zambia said.
The Bank of Zambia aims to diversify its reserves and sees the Yuan as a crucial component, aligning its strategy with the realities of its export market. Holding Yuan reserves makes it cheaper for Zambia to service its debts to China, allowing for more cost-effective financial management.
Accepting Yuan simplifies financial operations for Chinese mining companies operating in Zambia. Furthermore, Zambia’s move mirrors similar steps taken by other African nations like Kenya and Ethiopia, who are exploring Yuan-denominated debt to ease financial pressures.
To facilitate this transition, the Bank of Zambia has started publishing an official Renminbi-Kwacha exchange rate, giving mining companies the option to pay taxes in either US dollars or Yuan.
Zambia’s adoption of the Yuan is part of a broader trend in Africa, where countries are increasingly embracing the Chinese currency. This trend is driven by several factors. Growing trade with China has led to increased demand for the Yuan to facilitate trade.
Some African countries are using Yuan-denominated debt to reduce their reliance on the US dollar and potentially secure more favorable interest rates. Using the Yuan can also eliminate the need for multiple currency conversions, reducing transaction costs and foreign exchange losses. The increasing use of the Yuan in Africa is facilitated by the Cross-border Interbank Payment System (CIPS), which allows for direct Yuan transactions between financial institutions.
While the adoption of the Yuan presents opportunities, it also raises some concerns. Some analysts worry that increasing reliance on the Yuan could make African economies more dependent on China. The trade relationship between China and Africa is often characterized by an imbalance, with Africa exporting raw materials and importing manufactured goods.
This could be further exacerbated by the increasing use of the Yuan. There are also concerns that the Yuan could be subject to manipulation, which could negatively impact African economies.
Zambia’s decision to accept the Chinese Yuan for mining taxes is a significant development in Africa-China relations. It reflects the growing economic ties between the two regions and China’s increasing influence in Africa’s financial landscape.
While this move presents opportunities for Zambia and other African countries, it is crucial to carefully manage the potential risks and challenges to ensure that these partnerships are mutually beneficial. As China continues to play a major role in Africa’s development, the internationalization of the Yuan is likely to continue, reshaping the continent’s role in the global financial system.