Tanzania outlaws foreign currency pricing, reshaping EAC trade. What it means for Kenya, Uganda, and cross-border contracts.
Tanzania Bans Foreign Currency Pricing in Landmark Forex Regulation
DAR ES SALAAM, Tanzania – In a sweeping shift toward monetary sovereignty, the Government of Tanzania has officially outlawed the pricing and settlement of goods and services in foreign currencies, including the widely used US dollar. The change, effective March 28, 2025, is detailed under Government Announcement No. 198, signed by Finance Minister Dr. Mwigulu Nchemba and titled the Foreign Exchange Regulations of 2025.
“All prices of goods and services in the country shall be declared in Tanzanian shillings (TZS),” the regulations state.
Violating the law—by quoting or accepting payment in any foreign currency—is now a criminal offence, with only four narrow exceptions:
- Payments of government dues to regional organisations
- Transactions with international organisations and embassies
- Credit facilities from licensed financial institutions
- Purchases made at duty-free outlets
Contracts currently denominated in foreign currencies must be revised to TZS within 12 months, or risk being declared null and void.
Why This Move – And Why Now?
In June 2024, Finance Minister Nchemba warned that the overuse of foreign currencies—especially the US dollar—was “undermining the stability of the Tanzanian shilling and exposing the economy to unnecessary shocks.”
This policy shift reflects a growing trend across Africa: reclaiming control over local currencies and reducing dependence on the dollar.
Explore more: Why African countries are ditching the dollar
EAC Ripple Effects: What It Means for Kenya and Uganda
The East African Community (EAC) is a deeply integrated trade bloc, and Tanzania’s decision sends shockwaves across Kenya and Uganda. Thousands of cross-border traders and companies currently operate in contracts denominated in Kenyan shillings (KES) or US dollars.
“This could slow down cross-border transactions and complicate price benchmarking,” warns Dr. Josephine Kabatesi, a Kampala-based trade economist.
The result?
- A need to restructure contracts
- Greater exposure to Tanzanian shilling volatility
- Urgent demand for hedging solutions, which many SMEs lack
Learn more: Kenya’s Forex Rules and Trade Implications
Will Rwanda, Burundi, and South Sudan Follow?
With Rwanda pushing digital franc adoption, Tanzania’s policy may pressure other EAC states to harmonize currency laws. Burundi and South Sudan—both navigating delicate investor climates—must now choose between:
- Maintaining flexible foreign-denominated contracts, or
- Aligning with Tanzania’s hardline currency nationalism
Explore: EAC Common Currency – Timeline and Challenges
Business Disruption: Tourism, Mining, Logistics Hit Hard
The impact on multinationals and key sectors is immediate:
- Tour operators can no longer quote safaris in USD
- Importers must renegotiate long-term supplier deals
- Real estate developers targeting diaspora clients must rewrite dollar-based leases and sales contracts
“There’s an immediate compliance headache,” said Ahmed Rajab, a corporate lawyer in Dar es Salaam.
“But the long-term impact depends on whether the Tanzanian shilling remains stable.”
Continental Echoes: Ghana, Nigeria Watching Closely
Tanzania is not alone. In March 2025, Ghana’s central bank introduced new anti-money laundering rules targeting forex bureaus, in a bid to curb speculative dollar hoarding and illicit financial flows.
These moves form part of a continental trend: African nations reclaiming control of their monetary ecosystems amid shifting global power and dollar volatility.
Read: The African Push for Currency Sovereignty
Looking Ahead: Smart Policy or Economic Overreach?
Tanzania’s forex overhaul may strain regional trade, delay foreign direct investment (FDI), and create legal uncertainty. But if executed with clear exemptions and paired with monetary stability, it could:
- Increase use of TZS
- Reduce currency mismatch risk
- Encourage domestic financial ecosystem growth
“This could be the beginning of a bold new East African monetary model,” one Nairobi-based economist noted.
As the East African Community (EAC) moves toward a common currency, Tanzania’s move forces other member states to make a choice:
Defend dollar-backed systems, or double down on local currency independence.