Minister agitates for transaction in local currency

 

THE Deputy Minister for Finance and Planning, Dr Ashatu Kijaji, has reiterated that it is illegal to price goods and services for Tanzanians in US dollars or any in other foreign currency.

She said the law stipulates all commercial transactions should be contracted on local currency and not otherwise, calling on ‘wananchi’ to report any person charging Tanzanians in foreign currency. 

 

Dr Kijaji was responding to a question by Ms Faida Mohamed Bakar (Special Seats - CCM), who sought to know why the government hesitates interdicting all transaction involving US dollar or other foreign currency. She said the current trend where the shilling is losing ground against dollar is due to some business people pricing their goods and services in foreign currency.

“Use of dollar in purchasing products or services in some parts of the country is weakening our local currency. What is the government’s plan to promote use of shilling in any transaction in the country,” she charged. 

The deputy minister said according to a research conducted in 2013, transaction involving US dollar in the country accounts for only 0.1 per cent. She told the House that such transactions only involve areas which deal with foreigners like the tourist hotels, airlines and international schools.

Dr Kijaji further said that the Bank of Tanzania (BoT) and Tanzania Revenue Authority (TRA) have stepped up regulation at the bureau de changes to ensure all foreign currencies transactions are for economic, diplomatic and social activities only. 

She warned against businesses that peg prices in US dollars and convert them into local currency using their own exchange rates saying they risk penalties. 

‘’In Tanzania, only bureau de changes and commercial banks are allowed to trade in foreign currency according to the Financial and Banking Act,’’ she noted.

Dr Kijaji pushed for increased production of goods and services for export, to earn more foreign currency and subsequently strengthen the shilling.

The tendency of charging local goods and services in US dollars has been gaining momentum lately, with financial experts warning that this is soon likely going to render the shilling more or less extraneous. Sectors most notorious for charging services in dollars are air travel, the hospitality industry, housing and education where some schools have been exposed to be charging school fees in dollars.