Starting from March 28, Tanzania has introduced stringent regulations concerning the use of foreign currencies within its borders. These new rules, enacted under Government Announcement 198, aim to reinforce the Tanzanian shilling as the primary medium of exchange nationwide. Signed by Finance Minister Mwigulu Lameck Nchemba Madelu, the directive prohibits quoting prices or conducting transactions in any currency other than TZS, except for specific authorized activities. The legislation also invalidates contracts requiring payment in foreign currencies unless approved by relevant authorities, signaling a significant shift in financial practices across the country.
These measures follow last year’s government initiative highlighting the adverse impacts of widespread foreign currency usage. Under the newly enforced Foreign Exchange Regulations of 2025, businesses and individuals must adhere strictly to using Tanzanian shillings for all domestic transactions. Sub-regulation 2 of 3 explicitly forbids various forms of illegal conduct involving foreign currencies, including price-fixing and demanding payments in non-TZS denominations. Additionally, contracts stipulating settlements in foreign currencies are now considered unlawful unless granted explicit authorization by both the finance minister and the governor of the Bank of Tanzania.
A grace period of one year has been provided for amending pre-existing agreements to comply with these regulations before they become null and void. Furthermore, only four specific activities remain exempted from this restriction: payments related to government membership fees for regional organizations, dealings with international entities and embassies, credit facilities offered by financial institutions, and transactions at duty-free retail outlets.
This development marks a pivotal moment for enterprises operating in Tanzania, compelling them to adapt their operations to align with the exclusive use of the national currency. Meanwhile, in another part of Africa, Ghana's central bank recently collaborated with a national financial regulatory body to issue updated anti-money laundering guidelines targeting the foreign exchange bureau sector, reinforcing regional efforts towards financial integrity.
With the introduction of these regulations, Tanzania underscores its commitment to promoting economic stability through the strengthening of its local currency. By limiting foreign currency involvement in everyday transactions and contractual agreements, the government aims to mitigate potential risks associated with currency fluctuations and enhance overall monetary control. This move is expected to encourage greater reliance on the Tanzanian shilling, fostering a more unified and resilient financial landscape within the nation.