Jan 01, 2026
In a landmark decision that underscores a major shift in global economic alignments, Zambia has become the first African nation to officially accept the Chinese yuan for the payment of mining taxes and royalties.
This strategic move, initiated in October 2025, not only strengthens the growing economic partnership between China and Africa but also signals a continent-wide ambition to achieve greater financial independence by moving away from the U.S. dollar.
A Win-Win Partnership for Economic Growth
The Bank of Zambia has highlighted the pragmatic benefits of this policy, noting that it aligns with the nation’s export realities and strengthens its reserve management strategy.
With a significant portion of its primary export, copper, destined for China, accepting tax payments in yuan streamlines financial flows and enables Zambia to service its Chinese loans more cost-effectively. This move is a testament to the mutually beneficial nature of the Zambia-China relationship.
Zambia is at the forefront of a continental trend. Other African nations are recognizing the advantages of diversifying their currency holdings and deepening financial ties with China. Kenya, for instance, is set to save an estimated $215 million annually after converting a major railway loan from U.S. dollars to yuan.
Similarly, Ethiopia is in discussions with Beijing for a comparable arrangement that could dramatically lower its debt servicing costs.
Country | Strategic Yuan Initiative | Amount | Key Benefit |
Zambia | Accepting mining taxes in yuan | N/A | Enhanced financial efficiency and cost-effective debt management |
Kenya | Converted railway loan to yuan | $3.5 billion | $215 million in annual savings |
Ethiopia | Negotiating debt conversion to yuan | $5.4 billion | Potential for significantly lower interest rates |
Chinese Investment Fueling Zambian Development
China’s commitment to Zambia’s economic development is evident in the scale of its investments. Over 600 Chinese enterprises have invested more than $3.5 billion in Zambia’s vital Copperbelt Province, and Chinese firms are responsible for 69% of the construction industry, driving infrastructure development across the nation.
This has translated into tangible progress, including the rehabilitation of crucial railway lines and the modernization of transport fleets.
This deep economic integration is fostering a positive outlook among the Zambian population. Studies have indicated that despite some negative portrayals in the media, the general perception of Chinese influence among Zambian citizens is positive, recognizing the significant contributions to the nation’s growth and modernization.
Paving the Way for a New Financial Order
Zambia’s adoption of the yuan is a strategic step in a broader global shift towards a more multipolar financial system. By embracing the yuan, African nations are not only hedging against the volatility of the U.S. dollar and potential liquidity shocks but are also actively shaping a new financial architecture that better reflects the 21st-century global economy.
This move is facilitated by China’s strategy of “selective internationalization,” which extends the yuan’s global reach through carefully managed, state-directed mechanisms. By offering pragmatic financial solutions like currency conversions for debt, China is providing its African partners with valuable tools for economic stability and growth, turning potential fiscal challenges into opportunities for deeper collaboration and shared prosperity.
References
[1] Zambia becomes the first African country to take mining taxes in China’s yuan
[3] Ethiopia in Talks With China to Convert Dollar Loans to Yuan
[4] Debt Relief as Currency Strategy: China’s Renminbi Push in Africa
[5] Six Decades Later, Zambians Ask, “Were Chinese Mining Infrastructure Investments Worth It?”
