Tanzania’s central bank has announced stringent new regulations Monday for the country’s foreign currency exchange industry in an effort to expand access to hard currency while tightening oversight of the sector.
The Bank of Tanzania published the new rules creating three classes of operating licenses for privately owned storefront currency exchanges known as bureau de changes. The licenses impose varying requirements and permissions based on capitalization and ownership structures.
“Class A (a) Class A bureau de change shall be a foreign owned or locally owned bureau de change allowed to open branches anywhere in the United Republic of Tanzania,” the central bank said in a public notice.
The bank set a high minimum capital requirement of 1 billion Tanzanian shillings (approximately $430,000) for foreign-owned Class A bureaus. Locally owned Class A exchanges will need at least 500 million shillings in capital. The major benefit for Class A operators is the ability to open multiple branch locations nationwide.
Class B licenses are reserved for bureaus with at least 200 million shillings in capital and full local ownership, but prohibit opening additional branches. Class C permits are for hotels rated three stars or higher to offer currency exchange solely to resident guests. Class C carries no minimum capital obligation.
All classes of bureaus can provide remittance services domestically and internationally and act as agents for banks, insurers and telecom providers if approved by the central bank. Only Class A and B bureaus are authorized to conduct general public foreign currency operations.
Tourism industry groups welcomed the new Class C licenses as a boon for international travelers. “This will make exchanging money much easier for foreign visitors and help tourism,” said Zakia Meghji, chairperson of the Tanzania Tourism Council.
Economists cautioned that the tighter regulations could squeeze smaller operators. “The increased capital requirements may drive some independent bureaus out of business,” said Ibrahim Lipumba of the University of Dar es Salaam.
The Bank of Tanzania said the tiered licensing system aims to foster growth and competition while ensuring oversight of foreign currency flows. The regulations take effect October 31.
