In a bold move to strengthen the national currency and stabilize the economy, the Bank of Tanzania (BoT) has outlawed the use of foreign currencies, including the US dollar, for all local transactions. The new Foreign Currency Usage Regulations, 2025, published in the Government Gazette on March 28, 2025, mandate that all goods and services in Tanzania be priced and paid for exclusively in Tanzanian Shillings (TZS). This landmark policy aims to halt the persistent depreciation of the TZS, which has lost nearly 9% of its value against the US dollar in early 2025 alone.
A Game-Changer for Local Businesses and Consumers
The regulations mark a significant shift for Tanzania’s economy, directly impacting businesses, consumers, and financial institutions. From retail shops to service providers, all entities must now advertise, quote, and accept payments solely in TZS. The BoT has made it clear: quoting prices in foreign currencies, compelling payments in dollars, or refusing TZS is now an offense. Existing contracts denominated in foreign currencies have until March 27, 2026, to transition to TZS, or they risk becoming void unless extended by the Minister of Finance.
“This is a decisive step to restore confidence in our shilling,” said a BoT spokesperson. “By prioritizing TZS in all transactions, we aim to enhance monetary policy effectiveness and curb the dollarization that has strained our economy.”
Who’s Affected?
Businesses: Retailers, hotels, and service providers must overhaul pricing systems to comply with TZS-only rules. Non-compliance could lead to penalties, with the BoT urging the public to report violations to the Financial Intelligence Unit or Tanzania Police Force.
Tourists and Foreigners: Visitors must exchange foreign currencies at licensed banks or Bureau de Change outlets. Bank cards and digital payments remain viable options for convenience.
Financial Institutions: Banks are tasked with facilitating currency exchanges and ensuring compliance in loan agreements, particularly for foreign currency loans, which are among the few exemptions.
Exemptions: Limited exceptions include government transactions with regional organizations, embassy-related payments, and duty-free shop purchases.
Why Now?
The Tanzanian Shilling has faced mounting pressure, with its value eroding due to widespread use of foreign currencies in local markets—a practice known as dollarization. This has undermined the BoT’s ability to manage monetary policy effectively. The 2024 amendments to the Bank of Tanzania Act laid the groundwork for stricter currency controls, but the 2025 regulations are the strongest action yet to reverse the trend. By mandating TZS usage, the BoT aims to boost demand for the shilling, stabilize its value, and foster economic sovereignty.
Stakeholder Reactions
Local business owners have mixed feelings. “It’s a good move for the shilling, but adjusting our systems overnight is a challenge,” said Amina Juma, a Dar es Salaam-based retailer. Meanwhile, tourism operators are concerned about the impact on foreign visitors, though many see digital payment options as a workaround. On platforms like X, Tanzanians are buzzing with optimism, with some hailing the ban as a step toward economic independence, though others worry about enforcement in informal markets.
What’s Next?
The BoT is rolling out awareness campaigns to educate stakeholders on the new rules. Financial institutions are gearing up to support businesses in transitioning contracts, while the government is closely monitoring compliance. As Tanzania charts this new course, all eyes are on the Tanzanian Shilling—and its potential to reclaim its place at the heart of the nation’s economy.
