Dar es Salaam. The amount of foreign currency deposits in commercial banks rose during the past year as companies sought to shield themselves against exchange risks.
The Bank of Tanzania (BoT) says in its October 2024 report that private sector deposits in banks amounted to Sh38.75 trillion (about 20 percent of gross domestic product) at the end of August 2024, compared to Sh37.95 trillion at the end of June 2024.
However, around 30 percent of the money was held in foreign currency, a rise from 26 percent in September 2023.
In addition, BoT revealed that the ratio of foreign currency deposits to broad money supply (M3) climbed to 25.2 percent in September 2024 from 22.8 percent a year earlier.
“The two ratios indicate an increase in the degree of financial dollarisation in the economy, which reduces the effectiveness of monetary policy,” the report says in part.
The BoT attributed the rising dollarisation to businesses hedging against foreign exchange risks, following a shortage of foreign currency liquidity in 2022-2023 and ongoing exchange rate speculation.
In a bid to curb the trend, the Bank of Tanzania Act was amended in June 2024, criminalising the use of foreign currency in domestic transactions.
Furthermore Finance minister Mwigulu Nchemba issued a decisive directive on June 13, 2024, aimed at curbing the widespread use of the US dollar within the country in a bid to address a critical challenge impacting the economy.
In his budget speech to the national assembly, Dr Nchemba highlighted the detrimental effects of dollarisation, where both public and private institutions demand payments in foreign currency for goods and services provided domestically, exacerbating the shortage of dollars and hindering economic progress.
The directive mandates that all transactions be conducted and advertised in Tanzanian shillings, aligning with the legal framework of the country and promoting financial stability.
Speaking to The Citizen, economists offer differing views on the drivers and implications of this shift toward dollarisation.
Dr Daudi Ndaki of Mzumbe University explained that businesses open foreign currency accounts to facilitate smoother cross-border transactions.
“Many businesses maintain these accounts to swiftly make or receive payments without the inconvenience of currency conversion. This is especially useful for businesses dealing with foreign currencies, as a stronger dollar enables them to buy more goods,” he said.
Dr Ndaki said however that quoting prices for domestic products or services in foreign currency is not ideal, as it increases the demand for foreign currency over the local currency.
“When foreign currency supply becomes tight, businesses operating in domestic markets face significant challenges,” he said.
Dr Ndaki’s view aligns with the notion that while holding foreign currency can mitigate certain risks for businesses, it could inadvertently destabilise the local economy if misused.
Prof Humphrey Moshi of the University of Dar es Salaam, highlighted that the dollar’s strength is largely influenced by the United States monetary policy, which has raised inflation and import costs globally.
“The strong dollar has made production costs and import expenses soar, and this has forced countries to rethink their trade strategies. Some major economies, like China, are now opting to trade in their own currencies,” he said
Prof Moshi suggested that Tanzania should explore local currency trading arrangements to reduce its dependence on the US dollar.
“This is an opportune time for countries like Tanzania to enter trading treaties based on local currencies. Joining frameworks such as BRICS, which already promotes local currency trade among its members, would be advantageous. With members like Saudi Arabia, it could also ease the burden of fuel costs,” he said.
BRICS is a group of 10 states including Brazil, China, Egypt, Ethiopia, India, Iran, Russian Federation, Saudi Arabia, South Africa, and United Arab Emirates. Saudi Arabia, too, has been invited to join.
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Africa: Rwanda Gets a Grip Of Marburg, But Mpox ‘Not Yet Under Control’
Monrovia — The Rwanda Minister of State responsible for Health, Dr. Yvan Butera, cautioned that while the country is beginning to see positive signals in its fight against the Marburg virus, the outbreak is “not yet over”. He, however, expressed hope that “we are headed in that direction”. The minister said the epidemiology trend, since the disease was first discovered in the country more than a month ago, is moving towards fewer cases.
Dr. Butera, who was giving updates during an online briefing yesterday, said in the past two weeks, only two deaths were recorded while 14 people recovered from the disease. He said Rwanda was expanding its testing capacity with 16,000 people already inoculated against the disease.
The priority right now, Butera said, is “rapid testing and detection”.
Marburg is a highly virulent disease transmitted through human-to-human contact or contact with an infected animal. The fatality rate of cases, which has varied over the period, is more than 50%, according to the World Health Organization. WHO said the highest number of new confirmed cases in Rwanda were reported in the first two weeks of the outbreak. There’s been a “sharp decline” in the last few weeks, with the country now tackling over 60 cases.
At Thursday’s briefing, a senior official of the Africa Centers for Disease Control, Dr. Ngashi Ngongo, said mpox – the other infectious disease outbreak that countries in the region are fighting – was been reported in 19 countries, with Mauritius being the latest country to confirm a case. He said although no new cases have been recorded in recent weeks in several countries where outbreaks occurred previously – including Cameroon, South Africa, Guinea, and Gabon – Uganda confirmed its first Mpox death. This, he said, is one of two fatalities reported outside Central Africa.
Dr. Ngashi revealed that there was an increase in cases in Liberia and Uganda. He said mpox cases were still on an upward trend.
“The situation is not yet under control.”
Source: allafrica.com
Tanzania Confirms Second Marburg Outbreak After WHO Chief Visit
Dar es Salaam — Tanzania’s President Samia Suluhu Hassan has declared an outbreak of Marburg virus, confirming a single case in the northwestern region of Kagera after a meeting with WHO director-general Tedros Adhanom Ghebreyesus.
The confirmation follows days of speculation about a possible outbreak in the region, after the WHO reported a number of deaths suspected to be linked to the highly infectious disease.
While Tanzania’s Ministry of Health declared last week that all suspected cases had tested negative for Marburg, the WHO called for additional testing at international reference laboratories.
“We never know when an outbreak might occur in a neighbouring nation. So we ensure infection prevention control assessments at every point of care as routine as a morning greeting at our workplaces.”Amelia Clemence, public health researcher
Subsequent laboratory tests conducted at Kagera’s Kabaile Mobile Laboratory and confirmed in Dar es Salaam identified one positive case, while 25 other suspected cases tested negative, the president told a press conference in Dodoma, in the east of the country today (Monday).
“The epicentre has now shifted to Biharamulo district of Kagera,” she told the press conference, distinguishing this outbreak from the previous one centred in Bukoba district.
Tedros said the WHO would release US$3 million from its emergencies contingency fund to support efforts to contain the outbreak.
Health authorities stepped up surveillance and deployed emergency response teams after the WHO raised the alarm about nine suspected cases in the region, including eight deaths.
The suspected cases displayed symptoms consistent with Marburg infection, including headache, high fever, diarrhoea, and haemorrhagic complications, according to the WHO’s alert to member countries on 14 January. The organisation noted a case fatality rate of 89 per cent among the suspected cases.
“We appreciate the swift attention accorded by the WHO,” Hassan said.
She said her administration immediately investigated the WHO’s alert.
“The government took several measures, including the investigation of suspected individuals and the deployment of emergency response teams,” she added.
Cross-border transmission
The emergence of this case in a region that experienced Tanzania’s first-ever Marburg outbreak in March 2023 has raised concerns about cross-border transmission, particularly following Rwanda’s recent outbreak that infected 66 people and killed 15 before being declared over in December 2024.
The situation is particularly critical given Kagera’s position as a transport hub connecting four East African nations.
Amelia Clemence, a public health researcher working in the region, says constant vigilance is required.
“We never know when an outbreak might occur in a neighbouring nation. So we ensure infection prevention control assessments at every point of care as routine as a morning greeting at our workplaces.”
The Kagera region’s ecosystem, home to fruit bats that serve as natural reservoirs for the Marburg virus, adds another layer of complexity to disease surveillance efforts.
The virus, closely related to Ebola, spreads through contact with bodily fluids and can cause severe haemorrhagic fever.
Transparency urged
Elizabeth Sanga, shadow minister of health for Tanzania’s ACT Wazalendo opposition party, says greater transparency would help guide public health measures.
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“This could have helped to guide those who are traveling to the affected region to be more vigilant and prevent the risk of further spread,” she said.
WHO regional director for Africa Matshidiso Moeti says early notification of investigation outcomes is important.
“We stand ready to support the government in its efforts to investigate and ensure that measures are in place for an effective and rapid response,” she said, noting that existing national capacities built from previous health emergencies could be quickly mobilised.
The situation coincides with leadership changes in Tanzania’s Ministry of Health, with both the chief medical officer and permanent secretary being replaced.
This piece was produced by SciDev.Net’s Sub-Saharan Africa English desk.
Source: allafrica.com
Zanzibar’s tourism body chairman Rahim Bhaloo resigns
Bhaloo, who is also Chairman of the Zanzibar Commission for Tourism (ZCT), cited pressing family issues as the reason for his departure.Continue Reading
