Tanzania announces stricter measures as dollar shortage looms

Barely a couple of months after Tanzania's President Samia Suluhu boldly stated that the country was in a good economic state, it is now starting to appear like she spoke too soon and may just be forced to swallow her words.

Suluhu, speaking at a rally for International Women’s Day in early March this year, said Tanzania is more economically stable than any other East African State.

She further went on to seemingly throw shade at Tanzania’s neighbours whom she claimed were grappling with dollar shortages and had hence resorted to them.

“My brothers and sisters, I want to tell you that Tanzania is doing well economically. In the entire East Africa region, we are better than other countries, let nobody lie to you. Right now, every country is complaining of dollar shortages while we have enough to last us four months,” Suluhu said then.

“Go to our neighbours, they do not have even a two-week supply. We are getting requests to guarantee their oil supplies but we have just been pretending that the situation is bad for us as well. We are doing well and our economy will be even stronger if we stay united.”

However, new measures taken by the Bank of Tanzania (BoT) have suggested that the country might not be in the best place economically and that it could just be facing a looming dollar shortage as well.

BoT, in a statement issued by Governor Emmanuel Tutuba, said these new regulations include the banning of unlicensed international brokers from buying or selling foreign currency in the country.

Governor Tutuba also said that, henceforth, there will also be a requirement that all forex transactions exceeding $1 million in the retail market be traded within the interbank foreign-exchange market at the prevailing rate.

BoT added that the new measures will take effect from Thursday,  June 1, 2022, further noting that they aim to safeguard the stability of the country’s financial system.

Governor Tutuba further revealed that Tanzania’s foreign exchange reserves fell from $5.5 billion in April last year to $4.9 billion this year, which he however claimed could last another 4–5 months.

Kenya is among other countries such as Nigeria, Malawi and Zimbabwe that have been battling an acute shortage of US dollars, which has been attributed to pressure from external debt repayments.