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Tanzania: Govt Says No to Dollarisation
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The Citizen (Dar es Salaam)
26 June 2008
Posted to the web 26 June 2008
The Government has reiterated its ban on the use of foreign instead of local currency in business transactions.
It has repeated its order that prohibits business enterprises and hotels to use foreign currency, particularly the US dollar, instead of the Tanzania shilling as a medium of exchange for goods and services.
The deputy minister for Finance and Economic Affairs, Mr Jeremiah Sumari, told the parliament in Dodoma yesterday that the Government was aware that, despite the order, business enterprises and hotels continued to use foreign currencies in their transactions.
He was responding to a question by Kwamtipura MP Zuberi Ali Maulid who had asked if the Government was aware of business enterprises and hotels which continued to act contrary to the government directive.
Last August the Government issued an order prohibiting business enterprises and hotels from charging customers for their products and services in foreign currency, especially the US dollar, instead of local currency.
After taking into consideration outcries from MPs and the public as well as the Foreign Exchange Act of 1992 and the Bureaux de Change Regulations of 1999, the government made the decision that prohibits the use of foreign currency as a medium of exchange for local products and services in the market, he said.
The Government through the order, which also analysed the issue of dollarisation, directed among other things, that prices for products and services should be valued in terms of local currency.
It also directed that Tanzanians should not be forced to pay for goods or services provided in the country in foreign currencies, he explained.Mr Sumari said doing otherwise was going against the law and contrary to government directives.
He explained that the order exempts services and goods offered to tourists and other visitors. This is because they can be valued in both foreign and local currencies and the customer can buy them using the currency that he/she has at that particular moment, he further said.
Meanwhile, the deputy minister told Parliament that the old US dollar notes with the portrait of the first US president, George Washington, is smaller than the new US dollar notes.
Responding to a supplementary question by the special seats MP, Ms Lucy Owenya, the deputy minister said machines used by various bureaux de change to authenticate various notes failed to verify the old version of US dollar notes.
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"The new version of currency authentication machines used by most bureaux de change has replaced the older ones. So they failed to verify the old version of US dollar notes. In this way they should be applicable in the US but not in Tanzania," he said.
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