Zambia Says Yes to the Yuan — What It Means for Africa and the World
This article will count 0.25 units (15 minutes) of unverifiable CPD. Remember to log these units under your membership profile.
Zambia has become the first African country to officially accept China’s yuan for mining taxes and royalties. This bold move reflects a bigger shift in how global finance is changing. The decision, announced by the Bank of Zambia, allows mining companies, with many of them being Chinese, to pay taxes in yuan instead of converting to US dollars. The bank began accepting yuan payments in October 2025 and has also started publishing an official yuan-kwacha exchange rate to support the system. This isn’t just a technical adjustment, it’s a sign of how China’s currency, the yuan (also known as renminbi), is gaining ground as an alternative to the US dollar, especially in Africa’s resource-rich economies.
Why Zambia’s move matters
Zambia is Africa’s second-largest copper producer, and China is both its biggest buyer and one of its main creditors. By accepting yuan:
Zambia saves on currency conversion costs
It can repay Chinese loans more easily
It aligns its tax system with the reality that much of its copper trade is already yuan-based
According to the Bank of Zambia, holding yuan as part of its reserves will also help diversify the country’s finances and strengthen its debt strategy. It must be noted that while the policy only applies to mining sector tax payments, it does not eliminate the use of the dollar in other parts of the economy. Zambia still uses the dollar for other taxes, trade, and global transactions.
China’s bigger goal: Make the yuan global
This development is part of a wider strategy from Beijing. For years, China has pushed to internationalise the yuan, making it a serious player in global trade, finance, and investment. Africa is becoming a key testing ground for that effort:
Kenya recently restructured part of a $5 billion loan from China into yuan, saving around $250 million a year.
Ethiopia is in talks to do the same, hoping to stabilise its economy and manage debt more sustainably.
The People’s Bank of China reports that the yuan’s share in global trade finance has jumped from just 2% to about 7% in the past five years. Zambia’s move will likely encourage more countries to consider similar steps.
What this means for Africa
Using the yuan gives African countries more flexibility in managing their finances, especially those with large Chinese trade or debt relationships. It also reduces over-dependence on the US dollar and helps governments cut costs in tough economic times. But it’s not without risks. Relying too heavily on one foreign currency, even the yuan, can create new vulnerabilities. So each country will need to balance the benefits of cost savings with the need for financial independence.
Zambia’s decision reflects a continent adapting to new realities in global trade, and a world where the US dollar no longer dominates every transaction. As China expands its currency’s reach, more African nations may follow Zambia’s lead. Whether that’s a smart move will depend on how well it supports jobs, growth, and economic sovereignty on African terms.
Article Source: Business Insider Africa
