Dollarisation crackdown looms
DODOMA: PRIME Minister Mwigulu Nchemba has directed the Bank of Tanzania (BoT) and other regulatory authorities to intensify enforcement measures against foreign currencies use in domestic transactions, warning that persistent violations could be facilitating money laundering and other illicit activities.
The Prime Minister issued the directive yesterday in Parliament while responding to a question from a Special Seats legislator, Suma Fyandomo, who sought clarification on the government’s position regarding the continued use of the US dollar in domestic transactions.
Dr Nchemba said the Tanzanian shilling remains the country’s sole legal tender and warned that quoting prices, advertising goods and services, or conducting local transactions in foreign currencies without lawful justification contravenes the law.
“Let me direct our institutions that oversee the law, the Central Bank of Tanzania and other relevant authorities to continue monitoring these areas. Those who use foreign currencies to quote prices or sell goods in order to conceal other activities, including money laundering, must be controlled because such actions are against the law,” he said.
Dr Nchemba said the government had already amended relevant laws and issued guidelines requiring all payments and price quotations within Tanzania to be made in Tanzanian shillings.
“The official currency for legal payments within our country is the Tanzanian shilling. This is not optional. It is a legal and constitutional matter,” he said.
He explained that the regulations require prices, advertisements, purchases and sales of goods and services to be quoted and settled in shillings, except in a few specifically designated sectors involving international transactions.
The Prime Minister noted that the government had already addressed several instances where foreign currencies were previously used, including within some public institutions.
“Before these guidelines were issued, there were cases where people were required to pay in (US) dollars, even in some government-related transactions. We have stopped all of that,” he said.
He warned that individuals who continue to quote prices for land, rents, fees and other services in foreign currencies were violating Tanzanian laws and undermining the country’s economic sovereignty.
“Using foreign currencies indiscriminately is not only against the law but is also unpatriotic. Tanzanians should respect and support their national currency,” he said.
He further suggested that some individuals use foreign currency pricing as a cover for suspicious financial dealings.
“Some are advertising prices in dollars so that later it appears as though properties were sold for large sums. In some cases, these are dirty games linked to money laundering and other illegal activities,” he said.
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However, the Prime Minister said the government’s immediate focus would be on public education rather than punishment.
“We want to provide more education so that citizens understand the importance of using our national currency. Going straight to punishment may not be the best approach at this stage,” he said.
He urged Tanzanians to embrace the use of the shilling and cooperate with government efforts to strengthen confidence in the country’s currency and financial system.
“The Tanzanian shilling is the legal tender in our country. Citizens should respond positively to the education being provided and ensure they comply with the law,” the Prime Minister said.
His remarks came after Ms Fyandomo raised concerns over the widespread practice of pricing goods and services in US dollars, particularly in the hospitality, real estate and land sectors.
She told Parliament that many businesses continue to advertise prices in dollars despite operating within Tanzania.
“Sometimes when we visit hotels, we are told a room costs 200 US dollars instead of being quoted directly in Tanzanian shillings. House rentals are also advertised in (US) dollars per month rather than in shillings. Even land is being advertised for sale in dollars rather than in our national currency,” she said.
Ms Fyandomo argued that the practice has caused confusion among many Tanzanians and called on the government to reinforce the use of the shilling in all domestic transactions.
