Dar moves to control dollarization of the economy

Amid the rapid market-led transition towards the exclusive use of US dollar in transactions across Tanzania’s economy, the Central Bank has issued a notice to the public prohibiting domestic payments for goods and services using foreign currencies between residents Tanzania as part of its efforts to tame dollarization of the economy.

The Bank of Tanzania (BoT) Governor Emmanuel Tutuba in a public notice issued yesterday noted as per Section 26 of the Bank of Tanzania Act 2006, the Tanzanian shilling is the only legal tender in the country adding that any act of refusing payment in Tanzanian shilling amounts to violation of the Bank of Tanzania Act 2006.

Tutuba noted that the Central Bank has recently observed violations of the directives against the vice issued in August 2007 and December 2017.

“The Bank of Tanzania would like to remind the general public that the Government’s directives issued are still valid and should be adhered to at all times. All prices of goods and services in Tanzania should be quoted in Tanzanian shillings. These pertain to rent for land, housing and office; fees for education; medical services, equipment and reagents; transport, logistic and port services; electronic equipment and telecommunication services;” he said.

He however said prices to be paid by tourists or non-resident customers may be quoted and paid in foreign currency.

“These include services such as accommodation, travel, airport and visa, transit trade and cargo handling. Tourists and non-residents who pay in foreign currencies must provide their identification documents such as passport and certificate of incorporation for companies for proper capturing and classification of statistics,” Tutuba said.

He noted that the exchange rate which will be used for making payment therein above should be displayed and should not exceed the prevailing market exchange rate.

“Any resident of Tanzania should use only Tanzanian shillings and not be forced or obliged to make payment to another resident of Tanzania for any good or service in foreign currency,” he said.