Chinese mining firms in Zambia have started paying royalties and taxes in yuan, as the currency gains ground on the continent. The Zambian authorities are the first in Africa to confirm they are accepting mining-tax payments in renminbi, Bloomberg reported.
Beijing has been trying to expand the yuan’s use in global trade, in part to protect its financial sector from potential negative actions from Western countries. Last year, the African Export-Import Bank and South Africa’s Standard Bank joined the Cross-border Interbank Payment System, China’s alternative to SWIFT, allowing African businesses to settle trade transactions with China in renminbi, bypassing the need to use the US dollar as an intermediary currency.
Africa has emerged as a key arena for Beijing’s moves to internationalize the yuan, Bloomberg noted: Last year Kenya converted dollar loans it owed to China into yuan-denominated debt, while Ethiopia has opened talks to pursue a similar move, and Zambia has said it may do the same.