Tanzanian Deputy Finance Minister allays fear over dollarized economy

However, Deputy Minister Kijaji said the government would continue taking various measures to save the shilling.

Tanzanian Deputy Finance Minister allays fear over dollarized economy

However, Deputy Minister Kijaji said the government would continue taking various measures to save the shilling.

11 September 2017 Monday 12:18
Tanzanian Deputy Finance Minister allays fear over dollarized economy

By Felix Andrew

THE government has said that it is not illegal to conduct transactions in foreign currency in Tanzania, but failure to accept shilling could land someone in jail, the Deputy Minister for Finance and Planning, Ashatu Kijaji has said.

Responding to a question poised by Vwawa legislator, Japhet Hasunga, (Chadema), and the Deputy Minister said Tanzania already passed foreign currency act in 1992.

The MP had wanted to understand the reasons which make some local companies still continue to charge their services in foreign currency especially in dollar, saying such practices threaten stability of shilling and can cause dollarization economy

“It is illegal to refuse Tanzanian shillings in any kind of payment in our country, Kiajiji said adding that even US dollar is allowed in the country.”

However, Deputy Minister Kijaji said the government would continue taking various measures to save the shilling.

Deputy Minister for Finance and Planning, Ashatu Kijaji.

According to her 99 percent of local businessmen are ready to use shilling in various transactions.

It was reported last year that dollarisation debate has ragged or quite some time, but it is far less than what most debaters argued over its impact on the economy.

The Bank of Tanzania (BoT) on its findings released last year shown that the usage comprises merely 0.1 per cent of the businesses in the Mainland and none in the islands.

Those businesses that prefer payments exclusively in dollar terms while quotation of prices in the same is limited to specific locations in Dar es Salaam such as Masaki, Mikocheni, Upanga and the like.

The report, Transaction Dollarisation in Tanzania, shows that some 3.2 per cent of the businesses in the Mainland and 4.5 per cent in Zanzibar quote prices in dollar. "But most of these businesses were willing to accept payments in shilling," researchers Nicas Nyabu, Johnson Nyella and Pantaleo Kessy say.

The findings also indicated that quotation of prices in U.S. dollar is limited to specific locations and applies to specific products or services, and in most cases is done for bona fide reasons.

In Arusha, a tourism city, findings showed that merely 3.9 per cent of prices were quoted in dollar compared to 96.1 per cent in shilling out of 484 respondents.

In Dodoma, zero per cent was registered on the usage of dollar out of 228 respondents, being the only region that had a nil usage of dollar during the survey.

In Zanzibar, the highest region that registered highest dollarisation was Mjini Magharibi where 7.6 per cent of businesses quoted their prices in dollar compared to 92.4 per cent out of 145 respondents. The report shows that respondents deemed risky to accept dollars due to exchange fluctuations.

Azania Post

Updated: 12.09.2017 10:14
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