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Mr. Emmanuel Tutuba, the Governor of the central bank, emphasized
that the government is actively implemnenting measures to increase the supply
of dollars.
He cautioned dealers suspected of withholding currency,
highlighting the potential risks they face in the evolving economic landscape.
“I believe that those engaging in black market activities
will face significant losses in the future because the economy is opening up and
global economic risks are decreasing” stated Mr. Tutuba during a meeting last
week with stakeholders in the hospitality industry.
The governor expressed concern that foreign currency,
particularly from hotels, is still finding its way into the black market.
He urged hotels to acquire licenses for currency exchange
operations to ensure compliance with regulations. However, by March 2024, only
one hotel had applied for a license, yet the Foreign Exchange Bureaus
Regulations were amended in October 2023.
Additionally, Tutuba assured that the central bank remains committed
to ensuring the availability of foreign currency and supporting legitimate
forex market activities. At the same time, strict action will be taken against
any illegal trading practices.
This warning coincided with the central bank's recent sale
of $100 million, part of broader efforts to ease foreign currency supply constraints
in the country.
Duringa recent meeting with experts from the public and
private sectors at the Technical Level Strategic Dialogue, Finance Minister
Mwigulu Nchemba also hinted at the government's efforts to find a way out of
the current dollar shortage. He said that there could be light at the end of
the dark tunnel once the country's megaprojects start operations.
According to him, the acquisition of raw materials for the
Standard Gauge Railway (SGR) and Julius Nyerere Hydropower Project (JNHPP) will
require substantial foreign currency. “Once these projects conclude, the dollar
crisis will be history” he said.
At the height of the dollar crisis in Mid-2023, the government
intensified measures to alleviate the US dollar shortage in the country, which
included providing export credit guarantee schemes and increasing exports by
supporting local businesses.
Other steps taken by the government include the purchase of gold,
where about 400 kg of gold were bought by July to reinforce the national
reserve and provide a shield against the volatile greenback.
The dollar crisis In Tanzania is attributed to a combination
of different factors, which include a shift in international trade dynamics,
fluctuations in commodity prices, and geopolitical tensions. All these factors
negatively affected the country’s economic activities.
However, a raft of measures, including a crackdown on the
black market, have seen a gradual improvement in accessing the US currency,
although businesses are yet to recover to pre-crisis levels where huge sums of
the dollar were readily available at various financial institutions.
Today, many traders still can't guarantee access to the US
dollar, a situation which has continued to disrupt businesses by driving up costs
of operation and trimming profit margins.
In the market, there are two parallel exchange rates, with
lenders buying and selling well above BoT indicative figures and those on the front
boards. THE CITIZEN