Tanzania bans use of US dollars, other foreign currencies for local transactions

The Bank of Tanzania has officially banned the use of all foreign currencies, including the US dollar, for domestic transactions and payments, in a bold move aimed at stabilizing the Tanzanian shilling and strengthening monetary policy control.

The sweeping policy change was announced in a government gazette published on March 28, 2025, and applies to all individuals and businesses operating in the country. Under the new regulations, goods and services must now be priced and paid for exclusively in Tanzanian shillings (TZS).

“All pricing and payments for goods and services in Tanzania must be made in Tanzanian Shillings. Any attempt to quote, advertise, or facilitate payments in foreign currency is now a punishable offence,” the Bank of Tanzania said in a statement signed by Governor Emmanuel M. Tutuba.

The move comes amid mounting concern over the dollarization of the Tanzanian economy — a situation in which foreign currencies are increasingly used in daily transactions, undermining the central bank’s control over local monetary policy. Analysts have also pointed to the depreciation of the shilling in recent months, partly driven by high demand for foreign currency in trade and tourism.

While certain transactions involving foreign currency—such as international trade and investment agreements—will still be permitted under specific guidelines, the bank has placed a time limit on already existing contracts that were signed in foreign currency. Renewing such agreements in foreign denominations will now be prohibited.

Tourism and Business Sectors Affected

The directive extends to foreigners, including tourists, who must now exchange their dollars, euros, or other currencies at official commercial banks or licensed bureau de change outlets. However, the use of bank cards and digital payments remains allowed, easing the burden on visitors.

“Tourists can continue to pay using international debit and credit cards, but cash transactions must be conducted in shillings,” the bank clarified.

The policy may particularly impact Tanzania’s thriving tourism industry, where pricing in dollars has been a common practice for hotels, tour operators, and safari services. Businesses will need to adjust quickly, as quoting or accepting payments in dollars will now be illegal.

Crackdown and Enforcement

To ensure compliance, the central bank has called on the public to report violations to the Bank of Tanzania or relevant law enforcement bodies, including the Financial Intelligence Unit and national police. Violators could face fines, closure of business operations, or legal prosecution.

This decision places Tanzania among a small group of countries taking decisive action to de-dollarize their economies. Critics, however, caution that the move could disrupt foreign investment and tourism if not managed with clarity and flexibility.

Still, officials maintain that the long-term benefits — including stronger policy independence, reduced inflation pressure, and greater control over the exchange rate — outweigh the short-term challenges.

“The health of our local currency is a matter of national interest,” said Governor Tutuba. “This is a step toward protecting our economy and ensuring a more stable financial future for Tanzanians.”