Tanzania Bans Foreign Currency Use in Local Transactions

DAR ES SALAAM – The Tanzanian government has implemented sweeping regulations prohibiting the use of foreign currencies for domestic transactions, requiring all goods and services within the country to be priced and paid for exclusively in Tanzanian Shillings (TZS).

In a move aimed at strengthening its national currency and monetary sovereignty, the Bank of Tanzania (BoT) issued a directive citing Section 26 of the Bank of Tanzania Act, 2006, which mandates that all domestic commercial activities must now be conducted using the local currency.

“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,” the BoT stated in its official announcement.

The ban affects all foreign currencies, including the widely used US dollar and neighboring Kenya’s shilling, which have traditionally been accepted for many transactions, particularly in tourism and cross-border trade regions.

The new policy requires existing contracts denominated in foreign currencies to be amended within one year to comply with the regulations. This transition period aims to give businesses time to adjust their operations and renegotiate terms with partners.

However, certain exceptions to the ban have been granted. Foreign currency transactions will still be permitted for contributions to regional organizations, dealings with embassies, and interactions with international organizations operating within Tanzania.

For tourists and foreign visitors, the rules allow continued use of digital payment methods and bank cards, with currency exchange services remaining available through commercial banks and authorized Bureau de Change outlets.

The policy change is expected to create significant challenges for cross-border traders, particularly with neighboring Kenya. Kenyan businesses operating in Tanzania will now be required to convert their funds to Tanzanian Shillings before completing any transactions, subjecting them to potential losses from exchange rate fluctuations.

Economic analysts suggest the move could disrupt established business practices in border regions where multiple currencies have traditionally been accepted. Small traders who previously quoted prices in Kenyan shillings or US dollars will face an adjustment period as they switch to the mandated single-currency system.

The central bank has encouraged citizens to report violations of these regulations as part of enforcement efforts, emphasizing that the policy aims to promote the use of local currency and strengthen Tanzania’s economic independence.

This currency restriction follows similar measures implemented by other African nations seeking to protect their monetary systems and reduce dependence on foreign currencies, particularly the US dollar, in domestic markets.​​​​​​​​​​​​​​​​