Govt bans business transactions in US dollars

31Dec 2017
The Guardian Reporter
Guardian On Sunday
Govt bans business transactions in US dollars

THE government has directed that all local payments in the country be made in the local currency from January next year.

Minister for Finance and planning Dr Phillip Mpango

Minister for Finance and planning Dr Phillip Mpango said this yesterday in Dar es salaam ina place statement that was availed to the Guardian.


He said schools fees in various private schools, hotels accommodation,  housing and office rentals including any other payments will now be required to be paid in the local Tanzania shillings and not any foreign currency.


According to the minister only such services which only those services which are aimed at tourists will be made in foreign currency mentioning them as including cross border air transportation from through Tanzania, cargo import fees and transportation  and Visas.


Also in the list include hotel prices to foreigners and that such people will be identified through their passport documentations when making their payments and or registration of their companies in foreign countries.


The minister also said the exchange rate for the currency will need to match with the international market price adding that such services will only be operated in banks and forex bureau and that any local residents should not be forced to make payments in foreign currency.


“I direct the government authorities to take serious actions to anyone who will go against the government directives,” he said.


Earlier this month the president John Magufuli directed the finance and planning minister to ensure the refrain from making payments in dollars in order to protect the local currency from depreciating.


“I blocked the contract that was prepared by the Bank of Tanzania (BoT) authorizing payment in dollars, I am saying if this continues they should not blame me later,” he said.


Earlier in September this year, while deliberating in parliament the deputy Finance and Planning Deputy Minister, Dr Ashantu Kijaji, said the depreciation of the local currency was due to many factors and had nothing to do with the use of US dollar in the country.


She was responding to Japhet Hasunga (Vwawa-CCM), who wanted to know, when the government would limit the use of the US dollar in the country to strengthen the value of Tanzanian shilling.


“There are some companies that sell their goods and services in US dollar, a tendency that, to a great extent, contributes to a fall in the value of local currency. What steps has the government taken to overcome this situation?” he had asked.


Dr Kijaji said the depreciation of the local currency was a result of varied macroeconomic fundamentals in the country as well as the economic status among countries that Tanzania was trading with.


She mentioned the factors that might lead to the depreciation of the country’s currency as foreign trade’s balance payment, inflation and other seasonal causes.