PRESS STATEMENT
UPND WELCOMES GOVERNMENT DECISION TO ALLOW USE OF CHINESE YUAN FOR MINING TAX PAYMENTS
The United Party for National Development (UPND) warmly welcomes Government’s decision to approve the use of the Chinese Yuan (Renminbi) as an optional currency for the payment of mining taxes and royalties by eligible mining companies.
This policy position is a pragmatic, strategic, and economically driven decision, anchored in Zambia’s trade realities, debt profile, and the structure of its mining sector.
Allowing the use of the Yuan will significantly minimise exchange rate risk and exposure, particularly translation and conversion costs that arise when transactions are routed through the United States Dollar. It will also reduce transaction and clearing costs associated with third-party systems such as the New York Clearing House, thereby enhancing efficiency for both Government and the private sector.
Importantly, this decision has direct benefits in relation to debt service management. China remains Zambia’s largest bilateral creditor, and a significant portion of Zambia’s external debt obligations are denominated in, or linked to, Chinese financing arrangements.
Facilitating Yuan-denominated inflows from mining taxes improves Government’s capacity to match revenues with debt service obligations, reduce currency mismatch risks, and enhance overall debt sustainability.
The mining sector is the backbone of Zambia’s economy, contributing significantly to Government revenue, export earnings, employment, and foreign exchange inflows. Notably, the sector has a strong and growing Chinese presence, with major Chinese investments across copper mining, processing, and related infrastructure. Allowing Yuan payments therefore aligns tax administration with the operational realities of the sector and strengthens compliance efficiency.
UPND believes this framework should go beyond mining taxes and Chinese debt service. It should be extended to broader Zambia–China trade and investment activities, including imports, exports, project financing, and industrial cooperation. This will further deepen bilateral economic relations and enhance Zambia’s attractiveness as an investment destination.
The broader economic benefits of this decision include:
- Lower transaction and compliance costs for mining companies and investors;
- Reduced pressure on US Dollar demand, supporting foreign exchange market stability;
- Improved predictability and efficiency in revenue collection for Government;
- Enhanced debt service efficiency, particularly with China as a major creditor;
- Greater investor confidence, especially from Chinese and Asian markets;
- Diversification of currency risk, strengthening economic resilience;
- Closer alignment between Zambia’s revenue streams and its external obligations.
This decision is not political in nature. It is a sound economic reform, consistent with global best practice and reflective of the New Dawn Government’s commitment to fiscal prudence, innovation, and economic transformation.
UPND fully supports this initiative and encourages continued stakeholder engagement to ensure smooth implementation and expansion of currency flexibility in key sectors of the economy.
Issued by:
Mark Simuuwe
UPND Media Director