The Bank of Tanzania (BoT) has announced an immediate ban on the use of foreign currencies, including the widely used U.S. dollar, for all domestic transactions. The move is part of a sweeping regulatory reform aimed at strengthening the Tanzanian shilling (TZS) and reasserting control over the country’s monetary system.
Under the new policy, all goods and services must now be priced and paid for exclusively in Tanzanian shillings. The ban targets the informal “dollarization” of the economy, particularly in popular tourist destinations such as Zanzibar and the Serengeti, where businesses commonly quote prices in dollars or euros.
BoT Governor Emmanuel Tutuba emphasized that the decision was driven by the need to “safeguard the integrity of our currency and ensure greater economic stability.”
“The growing use of foreign currencies in local transactions undermines our monetary sovereignty and reduces our ability to respond effectively to economic challenges,” Tutuba stated.
According to the new rules, quoting or accepting payments in foreign currencies is now illegal for any domestic transaction. Additionally, all contracts currently denominated in foreign currencies must be amended within 12 months to comply with the new law.
Tourists and other foreign visitors will still be able to use credit cards and digital payments for purchases. However, any cash transactions must be carried out in Tanzanian shillings, with currency exchanges limited to licensed banks and authorized forex bureaus.
This policy shift comes in response to a recent decline in the value of the Tanzanian shilling, which has depreciated by 3.6% against the U.S. dollar over the past year. Authorities argue that enforcing the exclusive use of the shilling will help reduce reliance on foreign exchange and bolster economic resilience.
While some economists have welcomed the move as a long-overdue effort to reclaim monetary control, others warn of potential disruptions, particularly in sectors like tourism and real estate, where foreign currency use is deeply embedded.
Nonetheless, the BoT has pledged to work with businesses to ensure a smooth transition and is urging compliance across all sectors. Non-compliance may attract penalties under the new legal framework.
