Zambia has introduced a new mining tax payment option that allows taxes to be settled in China’s yuan, also known as the renminbi, making it the first African country to accept the currency for this core state revenue stream. The policy links tax administration more directly to the payment realities of the mining sector, where copper sales into the Chinese market have become central to both export earnings and the flow of foreign currency into the economy.

The decision arrives at a moment when Zambia’s trade and debt relationships with China are already deeply embedded in the country’s economic structure. By late 2024, bilateral trade between Zambia and China stood at about US$6.08 billion, with Zambia’s exports, largely copper, contributing roughly US$4.82 billion of that total. The copper trade has placed China at the centre of Zambia’s external earnings, while financing arrangements have simultaneously made Beijing the dominant bilateral lender within Zambia’s debt portfolio.

As of late 2025, Zambia’s outstanding obligations to China were estimated at approximately US$5.7 billion. That exposure, combined with persistent foreign exchange constraints and the demands of debt restructuring, has kept currency management at the heart of fiscal planning. Within that environment, the move to accept yuan for mining taxes is presented as a practical adjustment that reduces friction between how mining revenue is earned and how mining taxes are paid.

Under the new approach, mining companies that receive yuan from Chinese buyers can remit their tax obligations in the same currency, removing the need to route settlements through the US dollar. That step is intended to bypass conversion costs that can accumulate through intermediary transactions and to reduce pressure on dollar liquidity, which has often been tight during periods of balance-of-payments stress. The framework also reflects an effort to match tax collection to real-world settlement patterns in a sector where buyers, contracts, and payment flows are increasingly linked to Chinese markets.

Beyond the operational impact on firms, the policy has implications for how the Zambian state manages reserves and external payments. The Bank of Zambia is expected to hold a larger share of yuan within the country’s foreign reserve composition as yuan-based revenue flows increase. The central bank’s ability to retain yuan can provide a direct pool of currency for transactions tied to China, including trade-related outflows and debt service where repayment obligations are connected to Chinese creditors or yuan-linked financing structures.

Supporters of the move frame it as a cost-saving mechanism that improves efficiency for both government and taxpayers. The argument is straightforward: if part of Zambia’s export revenue and external liabilities are already connected to China, allowing tax settlement in yuan reduces unnecessary currency churn and helps preserve scarce foreign exchange that would otherwise be used in conversion chains. In practice, that can mean lower transaction losses for mining firms and more predictable currency inflows for public finance planning, particularly where tax payments are material in scale.

Hon. Sunday Chanda, Member of Parliament for Kanchibiya, described the decision as a “positive and forward-looking step” in a signed statement, linking it to improved revenue efficiency, reduced debt-servicing costs, and closer alignment between fiscal policy and existing economic partnerships. He also signalled caution, warning that deeper entrenchment within a single-currency corridor could narrow Zambia’s longer-term autonomy if not managed with balance and clear safeguards.

That caution reflects a wider policy tension built into the move. Accepting yuan for mining taxes offers immediate transactional benefits, yet it also deepens the functional role of China’s currency in Zambia’s fiscal machinery. As trade settlement, debt service considerations, and now tax payments increasingly connect to a single financial ecosystem, the state’s exposure to currency concentration risks becomes more pronounced. The practical question becomes how Zambia maintains flexibility in external policy while integrating yuan into a growing share of public finance flows.

A further issue raised by analysts is institutional readiness. Handling larger yuan inflows and managing yuan liquidity within reserves requires capacity building, including risk controls for currency mismatches and systems for monitoring concentration. Where revenues are collected in one currency and certain obligations fall in another, reserve strategy has to anticipate volatility, settlement timing, and policy trade-offs. The yuan option can reduce dollar demand in some channels, but it also adds a second reserve-management track that must be actively governed to prevent overdependence.

The policy also carries wider symbolic weight within African commodity markets. For decades, dollar settlement has dominated across the continent’s mineral exports, even where buyers are concentrated in non-dollar jurisdictions. Zambia’s decision goes beyond small reserve diversification moves by placing the yuan directly into a central government revenue stream linked to the mining sector, one of the most fiscally consequential industries in the country. It is a functional change, not a ceremonial one, and it formalises a role for the yuan inside routine state collection systems.

Within global finance, the move can be read as part of a broader shift in payment practices where the yuan is expanding its presence in commodity trade, infrastructure finance, and bilateral settlement channels. Zambia’s case is particularly notable because it ties the currency to tax payments, which sit at the centre of sovereignty and fiscal authority. The government is effectively recognising that, for at least part of the economy, the currency of transaction is changing, and revenue rules must keep pace with how value circulates.

Whether other countries follow will depend on their own trade concentration, debt composition, and institutional capacity. For Zambia, the move signals a tighter alignment of fiscal operations with the realities of its largest export market and biggest bilateral creditor, while also placing greater responsibility on institutions to maintain diversification, manage reserve exposure, and protect flexibility as currency options expand within the tax system.