Tanzania’s government has provided official clarification on new foreign currency regulations following a meeting with tourism stakeholders on May 22.
Johnson Nyella, Principal Secretary for the Ministry of Finance, clarified that businesses are still allowed to quote and receive payment in foreign currency for cross-border services provided to foreigners. These services include international tour packages and online bookings.
All spending by foreigners within the country must be quoted and paid for in Tanzanian shillings.
“This applies to local hotel stays, park fees, local transport and any other on-the-ground services consumed by tourists while in the country,” said Nyella.
During the meeting, representatives of the Tanzania Association of Tour Operators presented several concerns about the impacts of the foreign currency regulations, including:
- The risk of foreign clients withdrawing from deals if prohibited from transacting in familiar currencies such as US dollars or euro
- Foreign banks’ reluctance to process transactions denominated in Tanzanian shillings
- Pricing transparency for international clients forced to convert costs
The Ministry of Finance said it has “committed to undertake further consultations and provide feedback and further guidance on the unresolved matters in due course”.
The Bank of Tanzania noted that reliance on foreign currencies, including the US dollar, for domestic transactions has weakened the Tanzanian shilling while persistent shortages in foreign currency have disrupted international trade and increased the cost of imports.
