Zambia has decided to repay loans and cover import costs directly to China in yuan, a move experts describe as a practical response to dollar shortages rather than a political signal, though it quietly advances China's long-term strategy to internationalize its currency.
Zambia's decision reflects the southern African nation's urgent need to ease a US dollar shortage and manage its debt. Experts say the shift is not a sign of geopolitical alignment but a rational economic choice. Dr Charles Mak of the University of Bristol Law School interprets the move as a practical response to acute dollar shortages rather than a political signal.
"For a government under severe liquidity pressure, accepting the currency of its largest creditor and trading partner is a rational way to ease balance-of-payments stress, reduce transaction costs and manage debt service more efficiently," said the lecturer and assistant professor. He noted that the move has wider implications.
This development is part of Beijing's efforts to promote global use of the yuan. As a key African trading partner for China, Zambia's step helps reduce reliance on the dollar. Chinese mining firms like the China Nonferrous Metal Mining Group (CNMC) operating in Zambia's Copperbelt region stand to benefit from yuan usage. Similar initiatives have emerged in countries like Ethiopia and Kenya.
Though incremental, the step signals growing yuan influence in Africa. Under President Hakainde Hichilema, Zambia's government faces debt restructuring pressures, and this decision aids economic stabilization.