Tanzania Declares U.S. Dollar Illegal for Local Transactions in Bold Economic Shift

By iNewsAfrica | May 21, 2025

In Summary:
Tanzania has officially banned the use of the U.S. dollar and other foreign currencies for domestic transactions, effective March 28, 2025. The move aligns with BRICS’ de-dollarization agenda aimed at strengthening national currencies and reducing foreign dependence.

In Brief:

• Policy Enforcement: New Foreign Currency (Use) Regulations mandate the Tanzanian Shilling as the sole legal tender for pricing and payments across all sectors.

• Tourism Impact: Tourists must convert foreign currencies into Shillings at official exchange points; bank cards remain usable.

• Limited Exceptions: Only specific transactions involving international organizations or diplomatic missions are exempt.

• Strategic Objective: The government aims to restore monetary sovereignty, stabilize the economy, and reduce reliance on the U.S. dollar.

Dodoma, Tanzania — In a sweeping monetary reform effective March 28, 2025, the government of Tanzania has banned the use of the U.S. dollar and all other foreign currencies in domestic transactions. The directive, enforced under the new Foreign Currency (Use) Regulations 2025, mandates that all payments, quotations, and advertisements for goods and services must be made exclusively in Tanzanian Shillings (TZS).

The Bank of Tanzania announced that the new regulations apply to individuals, businesses, and institutions, including those in the tourism sector. Tourists are now required to exchange their foreign currency through licensed banks or exchange bureaus before making any purchases. However, digital payments through credit or debit cards will still be accepted.

Officials clarified that exemptions will be limited to essential international dealings, such as government payments to international bodies, embassy-related transactions, and specific cross-border corporate operations. These must be documented and justified.

This bold move comes as part of Tanzania’s alignment with the BRICS bloc’s growing push for de-dollarization—reducing global dependence on the U.S. dollar and promoting local currency usage. The government emphasized that this policy will improve the effectiveness of national monetary policy, curb inflationary risks, and reinforce public confidence in the Tanzanian Shilling.

Economists suggest that Tanzania’s approach may inspire other African nations considering monetary reforms to assert greater control over their financial systems.