CHOMBA MUSIKA
Lusaka
UNITED Party for National Development (UPND) has described as pragmatic Government’s approval of the use of Chinese yuan as an optional currency for payment of taxes by eligible mining companies.
UPND media director Mark Simuuwe says the apolitical decision is consistent with global best practice and reflects the New Dawn administration’s commitment to fiscal prudence, innovation and economic transformation.
Zambia has started accepting China’s yuan for mining taxes and royalties, becoming the first African nation to do so.
Mr Simuuwe said in a statement yesterday that the development is welcome as it is pragmatic and strategic.
“This policy position is a pragmatic, strategic and economically driven decision, anchored in Zambia’s trade realities, debt profile, and the structure of its mining sector,” he said.
Allowing the use of the yuan will significantly minimise exchange rate risk and exposure, particularly translation and conversion costs that arise when transactions are routed through the United States (US) dollar.
“It will also reduce transaction and clearing costs associated with third-party systems such as the New York Clearing House, thereby enhancing efficiency for both Government and the private sector.”
Mr Simuuwe said the move has direct debt service management benefits.
“China remains Zambia’s largest bilateral creditor, and a significant portion of Zambia’s external debt obligations are denominated in, or linked to, Chinese financing arrangements…https://enews.daily-mail.co.zm/welcome/home
