Tanzania has formally banned the use of foreign currencies, including the US dollar and euro, for all domestic transactions, requiring that payments for goods and services inside the country be made exclusively in Tanzanian Shillings (TZS).

The policy, which took effect on March 28, 2025, reflects the government’s determination to shield its national currency, which Bloomberg has ranked as Africa’s worst-performing currency so far in 2024, having depreciated by over 10% against the US dollar.

The Tanzanian shilling has been under severe strain due to rising national debt, driven largely by major infrastructure projects such as the deep-water container port operated by India’s Adani Ports and Special Economic Zone Ltd. and the $5 billion oil pipeline transporting crude oil from neighboring Uganda.

The surge in imports for these large-scale developments, along with broader global pressures—including ripple effects from former US President Donald Trump’s tariff policies—have further compounded the currency’s weakness.

Under the new rules, businesses across sectors, particularly in tourism, real estate, and high-value commerce, are strictly prohibited from quoting prices or accepting payments in foreign currencies.

All existing contracts denominated in foreign currencies must be converted into Tanzanian Shillings by March 27, 2026, unless an extension is granted by the Minister of Finance.

The Bank of Tanzania has been tasked with enforcing the new policy, with penalties for non-compliance including fines and the potential suspension of business operating licenses.

However, the government has allowed for specific exemptions: foreign tourists and non-residents are still permitted to pay in foreign currencies for services such as hotels and tours, but only through approved channels and at official exchange rates.

Diplomatic missions, international organizations, and some foreign-currency-linked loans tied to trade or external financing are also exempt from the new regulations.

Authorities believe that the policy shift will help stabilize the shilling by reinforcing its role in the domestic economy, strengthening monetary control, and protecting the country’s foreign reserves.

Looking ahead, the government has committed to supporting the national currency through continued gold and foreign currency purchases, export promotion strategies, and import substitution policies aimed at reducing reliance on foreign goods.

Tanzania’s bold currency defense mirrors similar moves by other African countries such as Zimbabwe and Zambia, which have also rolled out aggressive policies to stabilize and strengthen their national currencies in the face of mounting economic pressures.