Zambia has held preliminary talks with China on a potential currency swap, a move that could help reduce risks in transactions with the southern African country’s largest bilateral creditor, a senior finance ministry official said.
The technical-level discussions took place as Zambia works to finalise a years-long debt-restructuring process, Masitala Mushinga, director of the debt-management office, Bloomberg reported.
Yuan for mining taxes
Business Insider Africa previously reported that Zambia has become the first African country to formally accept China’s yuan for mining taxes and royalties, underscoring Beijing’s growing financial influence across the continent’s most strategic resource sectors.
Zambia’s move reflects a broader trend, as Africa increasingly becomes a testing ground for China’s long-running push to internationalise the yuan.
In October, Business Insider Africa reported that Kenya converted part of its Chinese debt into yuan to ease pressure on its finances, expecting to save about $250 million annually after restructuring a $5 billion railway loan from the Export-Import Bank of China.
Ethiopia has begun similar discussions, and Zambia has indicated it may follow suit.
To facilitate the change, the Bank of Zambia last month began publishing an official renminbi–kwacha exchange rate, giving mining companies the option to pay taxes in either dollars or yuan.