In December 2025, the Bank of Zambia (BoZ) issued the Currency Directives, 2025, establishing clear rules on how payments for domestic transactions must be settled. These directives have significant implications for businesses that invoice or receive payments in foreign currencies.

Key Requirement

The Directives require that all domestic transactions be settled in Zambian Kwacha (ZMW), except where specific exemptions apply. Even when a contract or invoice is denominated in a foreign currency, settlement must be made in Kwacha, converted at the prevailing market exchange rate or, where not agreed, the BoZ Kwacha/foreign currency mid-rate.

Invoicing/billing in foreign currency

While the Directives do not prohibit invoicing in foreign currency for pricing or reference purposes, businesses may not require or expect settlement in foreign currency for domestic transactions. Accepting foreign currency payments from resident customers constitutes non-compliance, and holding a foreign currency bank account does not provide an exemption.

Exemptions

Exemptions to the proposed foreign currency restrictions include the following:

  • Settle all domestic transactions in Zambian Kwacha.
  • Taxes remitted by the mining sector to the Zambia Revenue Authority through the sale of foreign currency to the Bank of Zambia at the current Bank of Zambia Kwacha/US dollar mid exchange rate or the current Bank of Zambia Kwacha/Chinese Renminbi mid exchange rate, as published on the Bank of Zambia website;
  • Tolls due in foreign currency to Government agencies;
  • Payment of a sum of money in or towards the satisfaction of an existing or a future foreign currency liability with a financial product issuer or service provider, including dividends, principal, and interest thereof. This includes:
  • Financial services denominated in foreign currency or structured with a foreign currency component and regulated by the Bank of Zambia under the Banking and Financial Services Act, 2017;
  • Securities denominated in foreign currency or structured with a foreign currency component and regulated by the Securities and Exchange Commission under the Securities Act, 2016; and
  • Insurance policies denominated in foreign currency or structured with a foreign currency component and regulated by the Pension and Insurance Authority under the   Insurance Act, 2021;

 

Mining transactions involving:

  • payment for tolling services in the mining sector, provided one of the parties remits taxes to the Zambia Revenue Authority through the sale of foreign currency to the Bank of Zambia;
  • inter and intra-company sale of minerals and processed mineral products, provided one of the parties remits taxes to the Zambia Revenue Authority through the sale of foreign currency to the Bank of Zambia;
  • payment to suppliers for highly specialised mining equipment and components; and
  • engineering services incidental to mining;

 

  • Payment by non-residents for tourism services offered by tourism enterprises registered under the Tourism and Hospitality Act, 2015;
  • Production, transmission, distribution, and trading of electricity;
  • Enclaves of foreign governments and bodies;
  • Exports and imports;
  • Exports of agricultural products and gemstones through aggregators and auctions; and
  • Payment by farmers to input suppliers for seeds, fertilizers, and chemicals supplied through trade credit.

 

Risks of Non-Compliance

Failure to comply with the Directives exposes businesses and their leadership to significant risks, including:

  • Fines and potential imprisonment under the Directives
  • Administrative penalties imposed by the Bank of Zambia
  • Personal liability for directors and senior management
  • Increased scrutiny from banks, auditors, and regulators
  • Disruption to revenue collection processes

Recommended Compliance Position

To minimize regulatory risk, businesses are advised to:

  • Settle all domestic transactions in Zambian Kwacha.
  • Where pricing is in foreign currency, clearly state that settlement will occur in Kwacha at the applicable exchange rate on the payment date
  • Update invoice templates and customer communications to reflect compliance
  • Train finance and sales teams on currency compliance requirements
  • Maintain exchange rate documentation for audit and regulatory review

Conclusion

Continued settlement of domestic transactions in foreign currency is inconsistent with the Bank of Zambia Currency Directives, 2025. Businesses should take prompt corrective action to ensure compliance, safeguard management from liability, and maintain regulatory credibility as enforcement of the Directives takes effect.