Tanzania Bans Use of US Dollars for Local Transactions to Bolster Shilling
Juba Global News Network May 5, 2025 Tanzania has officially banned the use of the US dollar and other foreign currencies for local transactions, mandating
Juba Global News Network
May 5, 2025
Tanzania has officially banned the use of the US dollar and other foreign currencies for local transactions, mandating that all payments be made in Tanzanian Shillings, as per new regulations published in the Government Gazette on March 28, 2025. The Bank of Tanzania (BoT) announced the measure in a public notice on Thursday, aiming to curb the depreciation of the Tanzanian Shilling, which has fallen nearly 9% against the US dollar by early April this year, making it one of Africa’s worst-performing currencies in 2025.
The BoT stated that pricing, advertising, or accepting payments in foreign currency within Tanzania is now an offense, emphasizing that the Tanzanian Shilling is the only legal tender. Foreigners, including tourists, are required to exchange their currency through commercial banks or licensed Bureaux de Change, though digital payments via bank cards remain permissible. The central bank urged the public to report violations to the BoT, the Financial Intelligence Unit, or the Police Force.
This move follows years of concern over dollarization in local markets, which has undermined monetary policy and weakened the Shilling. Previous directives in 2007, 2017, and 2023 attempted to limit foreign currency use, but enforcement was inconsistent. The 2024 amendment to the Bank of Tanzania Act, adding section 26(2), now makes it a criminal offense to transact in foreign currencies, with the Minister of Finance tasked to prescribe regulations—though these are yet to be published.
The ban aligns with broader African efforts to reduce reliance on the US dollar, with Tanzania exploring transactions in local currencies with countries like India. However, critics argue the timing may be premature, with some on X suggesting Tanzania should align with initiatives like the BRICS council to strengthen its economic position first. The policy could impact sectors like tourism and hospitality, where US dollars were widely accepted, potentially affecting pricing and accessibility for international visitors.
