On 28 March 2025, the Government of Tanzania issued the Foreign Currency Use Regulations under Government Notice No. 198, fundamentally changing how foreign currency may be used in domestic transactions. These Regulations were made pursuant to Section 70 of the Bank of Tanzania Act [Cap. 197 R.E. 2019], as amended by the Finance Act, 2023, which introduced a new subsection 26(2) prohibiting the use of currencies other than the Tanzanian Shilling for domestic transactions—unless otherwise permitted by the Minister through regulation.

1. Mandatory Use of Tanzanian Shillings: All prices and payments for goods and services within Tanzania must be quoted and made in Tanzanian Shillings. This requirement applies across all sectors and industries.

2. Limited Exemptions: A specific schedule of exempted transactions remains, allowing limited use of foreign currency. These include:
   1. Contributions by the Government to regional institutions;
   2. Transactions involving embassies and international organizations;
   3. Loans issued by commercial banks and financial institutions;
   4. Payments in duty-free shops.

3. Moratorium Period for Existing Contracts: A 12-month moratorium (ending 27 March 2026) applies to existing contracts that stipulate payment in foreign currency. After this period, such contracts will become void unless an extension is granted by the Minister. Notably, the entire contract becomes void, not just the foreign currency clause.

To comply with the new legal framework, businesses operating in Tanzania should:

1. Conduct a Contract Audit: Review all contracts, including employment and service agreements, that reference payment in foreign currency. Amendments should be initiated and completed before the moratorium expires.

2. Adjust Procurement Processes: Procurement and finance teams must review the pricing and payment terms of all locally sourced goods and services to ensure compliance, especially where foreign components are involved.

3. Review Internal Policies: Ensure that internal financial systems, payroll structures, and invoicing mechanisms are aligned with the mandatory use of Tanzanian

4. Engage Proactively Where Necessary: For sectors such as mining—particularly companies still negotiating agreements with the Government—any need to transact in foreign currency for local procurements should be raised with the Government Negotiation Team (GNT). While holding foreign currency accounts remains permissible, their use is now highly restricted for domestic transactions.

The Bank of Tanzania has urged the public to report any violations of the Regulations to the BOT, Financial Intelligence Unit (FIU), the Police, or other relevant enforcement authorities.

The Foreign Currency Use Regulations represent a major shift in Tanzania’s monetary and contractual environment. Entities must act swiftly to ensure compliance through timely contract amendments, policy reviews, and strategic engagement with regulators where exemptions may be required. Adhering to these Regulations not only mitigates legal risks but also reflects a commitment to sound governance and regulatory alignment in Tanzania.

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