The bank of Tanzania (BoT) has affirmed its order regarding a ban on using foreign currencies for payment of services and businesses offered within the country but only for cross-border transactions.

In June 2023 the central bank had issued a notice to remind the public that in August 2007 and December 2017 the government had issued notices prohibiting domestic payments for goods and services using foreign currencies among residents of the United Republic of Tanzania.

BoT’s Manager of International Economics and the Real Sector, Villela Waane said on Thursday in Dar es Salaam at a special meeting with bankers on the ban of foreign currencies within the economy that despite the notices, the bank continues to observe violation of such directives.

Waane said that it is on this background that the Minister of Finance in June 2024amende Section 26 of the Bank of Tanzania Act 2006, ruled it an offense for residents to transact within the country using any currencies other than the legal tender.

Section 26 of the mentioned Act states: ‘the bank shall have the sole right to issue banknotes and coins which shall be the only legal tender in Tanzania.’

“The section has been amended with an addition of two subsections one of which requires that a person who transacts using any currencies other than the legal tender issued by the Bank commits an offense,” said Waane.

She said the Section has been added with a subsection that affirms the restriction of foreign currencies in local payments.

According to her, the central bank has learned that there has been a considerable usage of foreign currencies, especially the US dollar in payment settlement for services such as school fees, house rent and in some contracts regarding the trading of cash crops.

Emmanuel Akaro, BoT's Director Financial Markets said that the purpose of calling the meeting with stakeholders from commercial banks is to remind them and ask them to educate their customers about the restriction.

"Another goal is to warn commercial banks that accepting payments in currencies other than Tshs is facilitating the violation of the said Act," he said.

According to Akaro, the goal of ensuring that a Tanzanian currency is used in local payments is to control inflation among other financial irregularities.

He said in November 2024 when the dollar depreciated, the majority of businessmen were worried about making payments due to the use of dollars in purchases where they were supposed to receive less than what they paid," said Akaro.