Tanzania’s Foreign Currency Ban
Tanzania’s recent ban on the use of foreign currencies for domestic transactions has ignited a heated debate across Africa and beyond, drawing reactions that range from cautious praise to sharp criticism.
Under new regulations effective March 28, the Bank of Tanzania now requires that all goods and services be priced and paid for strictly in Tanzanian shillings. The government states that this move aims to reduce currency depreciation and boost economic self-reliance. Beyond economic concerns, the policy has sparked broader Pan-African discussions about currency sovereignty and integration.
Deckerson Thomas, a Pan-African activist and author of *Or Porto, Shadow on the Horizon*, argued that Tanzania’s decision should inspire continental unity. “Africans are being wishful, speculative, and hopeful,” he said. “It’s time for Africans to act decisively, but first we must unite and stop regarding each other as foreigners.” He believes that the day Africans synchronize their economies and adopt a new currency, prosperity will begin.
Thomas sees Tanzania’s move as a catalyst that could reignite dreams of a unified African economy built on shared values and collective strength. Kingsley Tochukwu, a Nigerian inspection engineer, supports the decision, stating, “This is a wake-up call for Africa. The leaders who make such decisions recognize the suffering of their people as their own.” He urged leaders in Nigeria to follow suit, saying, “It’s encouraging to see countries take their own initiative for the future of their nations.”
Ali Adel, a business strategist based in Dubai working across sectors like real estate and oil and gas, praised Tanzania’s decision as a step toward economic sovereignty.
While some observers view the policy as a bold move toward currency sovereignty, others urge caution. Ian Sendagala, country director at Shule Child Aid Africa, noted that if Tanzania can successfully implement this policy, it could serve as a regional model. “If Tanzania can pull this off, it could become a blueprint for de-dollarization, rebuilding trust in local currency, deepening bond markets, and retaining capital within its borders,” he said.
However, Sendagala warned that without structural reforms to support the transition, the directive risks becoming “another well-intentioned decree that ultimately fuels price instability and creates parallel-market distortions.”
Critics express concerns about unintended consequences. Reginald Mudunge, a finance and strategy expert, questioned, “Who keeps their wealth in unstable currencies?” He warned that the policy could harm the Tanzanian banking system, stating, “Banks are run by customer deposits,” referring to the corporate and SME call deposits that may now shrink.
Eli Rozhansky, a nurse clinician, likened the policy to “a turbocharger for the black market,” while communications consultant Shi Kang’ethe expressed concern, stating that although her expertise is outside of finance, the decision appears potentially disruptive.
According to the World Bank, Tanzania, with a population of 69 million, is classified as a lower-middle-income country with a per capita GDP of $1,149.
The economy is relatively diversified, with agriculture accounting for approximately a quarter of value added, industry for a third, and services for the remainder.
Agriculture remains the largest source of employment, with two out of three Tanzanians relying on it.
