First African Country to Formally accept China’s Yuan for mining taxes and royalties
The Bank of Zambia confirmed that payments in renminbi began in October, marking a significant shift in how Africa’s second-largest copper producer manages its mining revenues.
Bloomberg reported that Chinese mine operators are now settling part of their tax obligations in yuan, reflecting the growing role of China as both Zambia’s biggest copper buyer and one of its largest creditors.
The central bank said the change aligns with its reserve-management strategy and export realities.
“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 has the diversification and building-up of its reserves as a key objective, and purchasing renminbi enables the bank to actualize this objective.”
The bank added that holding yuan also makes it cheaper to service Chinese debt, saying it would allow Zambia “to service its debts to China in a more cost-effective manner.”
Last month, the Bank of Zambia began publishing an official renminbi-kwacha exchange rate, allowing mining companies to choose whether to sell dollars or yuan to pay taxes.
Zambia’s move comes as Africa becomes a testing ground for China’s long-running push to internationalize the yuan.
To support the change, the Bank of Zambia last month began publishing an official renminbi-kwacha exchange rate, allowing mining companies to choose whether to sell dollars or yuan to pay taxes.
The system builds on rules introduced in 2018 and expanded in 2020 that forced miners to sell foreign currency to the central bank to boost Zambia’s depleted reserves during its debt crisis.
The shift to yuan payments signals that China’s influence in Africa’s mining economy is now being matched by its growing currency footprint.
Solomon Ekanem
Business Insider
What a great move BOZ and Minister of Finance, not forgetting the economist in the State House and also the PF government on this one coz I see 2018 and 2020 there.