Kenya, Zambia deepen shift to yuan as Africa trims dollar exposure

Kenya and Zambia are increasingly accepting and using China’s yuan (renminbi) for official transactions, trade, and debt servicing, marking a notable shift by African economies seeking to reduce reliance on the US dollar while deepening financial ties with Beijing.

The moves form part of a broader, emerging “yuan pivot” across Africa, driven by rising trade with China, dollar shortages, and mounting pressure on public finances. They also reflect China’s expanding financial influence across the continent’s strategic infrastructure and resource sectors.

Beyond Kenya and Zambia, Ethiopia—Africa’s second most populous country—is exploring similar debt-to-yuan arrangements, signalling that the trend may spread further as African governments look for alternatives to dollar-denominated obligations.

Experts say that yuan-denominated transactions can lower debt-servicing costs and ease foreign exchange pressure. However, warn that greater use of the yuan could deepen dependence on China and expose countries to risks linked to the currency’s limited convertibility and Beijing’s policy control.

In October last year, Kenya converted part of its Chinese debt into yuan as part of efforts to ease the strain on its public finances. The restructuring of a $5 billion railway loan from the Export-Import Bank of China into yuan-denominated debt is expected to save the country about $250 million annually, according to government estimates.

That same month, Zambia became the first African country to officially accept yuan payments for mining taxes and royalties. The Bank of Zambia confirmed that mining firms began paying part of their obligations in yuan, marking a significant shift for Africa’s second-largest copper producer.

The move coincided with a period of currency strength for Zambia. The kwacha was among Africa’s best-performing currencies in 2025, gaining 26 percent against the US dollar. In recent weeks, it was also ranked the world’s best-performing currency over a short period, following strong gains against the greenback.

Chinese mining companies—major players in Zambia’s copper sector—are now settling part of their tax obligations in yuan. The central bank said the decision aligns with the country’s reserve management strategy and reflects the realities of its export market, given China’s role as Zambia’s largest copper buyer and one of its biggest creditors.

For decades, China’s influence in Africa was built largely through infrastructure—roads, railways, ports, and power projects that reshaped the continent’s physical landscape. From financing highways in Kenya to building rail networks in Ethiopia, Beijing positioned itself as a central partner in Africa’s development drive.

That engagement is now evolving. China’s focus is shifting from bricks and steel to currency and finance, as it seeks to expand the international use of the yuan and reduce global dependence on the US dollar.

Although the yuan still accounts for less than two percent of global foreign exchange reserves, Africa is increasingly becoming a testing ground for Beijing’s currency ambitions.

Rising trade with China—the world’s largest exporter—has driven wider use of the yuan in trade finance, with its global market share increasing from about two percent to nearly seven percent over the past five years, according to data from the People’s Bank of China.

Bunmi holds a degree in Economics from the University of Lagos and has over eight years of experience in content writing and journalism.

Her career spans roles as a financial and business journalist at BusinessDay Media and TechCabal, and as Head of Research at SBM Intelligence, an Africa-focused market intelligence and strategic consulting firm.

She also served as Editor at Finance in Africa, a subsidiary of Businessfront and is currently Assistant Editor, Finance (Africa), at BusinessDay.

Join BusinessDay whatsapp Channel, to stay up to date