Tanzania has officially banned the use of foreign currencies such as the US dollar and Kenyan shilling for local transactions. From now on, all goods and services in Tanzania must be priced and paid for in Tanzanian Shillings (TZS).
This move, announced by the Bank of Tanzania (BoT), aims to promote the use of the local currency and reduce dependency on foreign currencies within the country.
Under the new rules, it is now illegal to quote prices, advertise, or accept payment in any foreign currency for goods or services within Tanzania.
“It is an offence to quote, advertise, or indicate prices in foreign currency, to compel, facilitate, or accept payment in foreign currency, or to refuse payment made in Tanzanian Shillings,” said the BoT in a statement.
The new regulation is based on Section 26 of the Bank of Tanzania Act, 2006.
Any existing contracts signed in foreign currencies must be revised within one year to comply with the new law. Businesses and individuals who fail to do so may face legal penalties.
The BoT clarified that some exceptions will apply:
Tourists and foreign visitors can still exchange their currency at banks or licensed Bureau de Change outlets.
Foreign embassies, international organizations, and regional contributions are allowed to use foreign currency.
Foreigners can still use digital payment methods such as credit or debit cards.
However, Tanzanian businesses must ensure all pricing is done in shillings, even if the payment comes from a foreign card.
For Kenyan businesses operating in Tanzania, this policy brings new challenges:
They must convert Kenyan Shillings to Tanzanian Shillings before making any transactions.
Contracts signed in Kenyan or US dollars will need to be amended.
Frequent currency exchange may increase transaction costs and expose traders to exchange rate fluctuations.
The BoT has asked Tanzanians to report any businesses or individuals who break the law by continuing to use foreign currency.
The central bank says the goal is to stabilize the economy and strengthen the Tanzanian Shilling by encouraging wider use of the national currency.
Tanzania joins several African nations that are pushing for stronger use of local currencies to promote economic independence and reduce inflation risks tied to foreign exchange volatility.
While the new rule could boost the local currency, it may also bring short-term disruptions for foreign investors, tourists, and cross-border traders.
