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Tanzanian money (World Atlas)- The Exchange

Tanzanian money (World Atlas)- The Exchange

No hope for Tanzania’s closed forex shops

by Salum Mohamed
April 17, 2019
in Industry and Trade, Tanzania
0
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The November 2018 closure of forex shops in Dar es Salaam by the government implicated 82 out the 87 forex shops in money laundering among other violations of the law.

So far, over 50 forex shops in the commercial capital have not opened business for weeks after the Bank of Tanzania (BoT) opened an impromptu inspection into their undertakings. Preliminary findings by the regulator found out that some of these businesses were flouting the law, regulations and procedures associated with the money changing business.

The BoT governor, Professor Florens Luoga stated that the ongoing probe has revealed a lot of rot, noting that a final report on the matter will be issued once the exercise is completed. The governor specified that only five of the 87 forex shops in Dar es Salaam were operating within the law and the rest were associated with money laundering.

The governor made the statement at a press conference convened by the Minister of Finance and Planning, Dr. Philip Mpango to brief reporters on the ongoing crackdown of forex shops in Arusha and Dar es Salaam.

The minister stated that the inspection revealed there were a lot of transactions from the formal money system to unlawful system, thus elements of money laundering weakening the local currency and among other actions threatening the national security. The minister further stated that some of the shops were found to spend a lot Tanzanian shillings buying foreign currencies, but few reports were found on how the foreign money left. He also insisted that the inspection was in line with national laws, contrary to complaints from some people that the exercise was against the law and was a violation of the traders` rights.

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The minister argued the BoT was following on the matter to ascertain the facts behind various transactions. He also said relevant legal procedures were followed in confiscating various equipment like computers, mobile phones or special information storage machines to help with investigations, and no money confiscated from the shops was nationalized. The minister stated the government has prepared new policies specifying on licence application and operation of forex shops noting that the guidelines will help to create a good business environment and eliminate risks to the entire financial sector.

Speaking on the effects of the inspection, he said the shilling has slightly gained strength rising from Tshs.2450 against the dollar at the onset of the inspections to an average Tshs.2300 currently. At the same time, commercial banks have also increased their daily collection of foreign currencies reaching Tshs.34.5 billion ($15 million) per day. The minister hoped that through the government`s control of the business, commercial banks and other financial institutions in the country would trade more foreign currencies thus increasing their stock. He also dispelled speculations that the government carried out the crackdown because it lacked foreign currency in its coffers.

Also read: The Tanzanian forex business under scrutiny

Tanzania forex business shifted to banks

Tags: ArushaBank of Tanzaniabureaux de changeDar es SalaamFlorens LuogaForex shopsPhilip MpangoTanzania

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Salum Mohamed

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