Dar es Salaam. The US dollar remains a scarce commodity in Tanzania, yet the real estate and hospitality industries persist in quoting prices in dollars—a practice deeply entrenched in the country’s economic landscape.
While this approach has faced criticism over the years, with regulatory authorities issuing stern warnings, industry insiders attribute its prevalence to various factors shaping sector dynamics and pricing strategies.
Historically, the US dollar has provided relative stability compared to the Tanzanian shilling, which has experienced volatility due to economic factors.
By pricing in dollars, stakeholders in these industries aim to mitigate currency devaluation risks, safeguarding investments against potential purchasing power losses.
Speaking to The Citizen, James Prevost, the managing director of REMAX Tanzania, a real estate agency, attributed the trend to the global stability of the US dollar compared to the shilling, something that he says plays a significant role in this pricing practice.
“Using the dollar provides a stable and internationally recognised currency for transactions, especially when dealing with international buyers,” he says.
This, according to him, can help mitigate currency exchange risks and uncertainties.
In his view, the nature of the real estate market involves global players, including developers, investors, and buyers, who are accustomed to dealing in dollars due to its status as a global currency.
“This makes it easier for them to evaluate and compare properties across different markets.”
He added that it can also help in marketing properties to a wider audience, including those from countries where the dollar is a preferred currency for investment purposes.
In his view, quoting prices in dollars in the real estate business is a strategic decision aimed at facilitating international transactions, reducing currency risks, and attracting foreign investment.
“This stability offers reassurance to investors and property owners, providing a reliable benchmark for pricing assets in these sectors,” he says.
Mr Provost’s reasons for the dollar use are corroborated by another realtor, Emillian Rwejuna, the managing director of Prime Locations, though he says it is not a blanket practice.
“All products targeting international organisations and individual foreigners are quoted in dollars to make it easy to understand, especially in the beach areas, but the products targeting local markets are all quoted in the Shilling,” says Mr Rwejuna.
He, however, says that some unscrupulous property owners and agencies take advantage of that advantage to maximise currency inflation risk, especially in upmarket areas.
He acknowledges the potential drawbacks of quoting prices in dollars, particularly in a predominantly cash-based economy like Tanzania.
Realtors, however, say that inflationary pressures can erode the value of local currency over time, making it less desirable as a pricing unit, especially for long-term investments such as real estate.
A property designer and developer in Zanzibar, who spoke to The Citizen on condition of anonymity, said reliance on foreign currency pricing exacerbates socioeconomic disparities and limits access to property ownership and hospitality services for ordinary Tanzanians.
“Exchange rate fluctuations and currency conversion costs can introduce uncertainties and complexities into transactions, affecting affordability and liquidity for local buyers and investors.”
In Zanzibar, where tourism is the main economic activity, most hotel prices and other related services are quoted in dollars.
Just like in the real estate industry, service providers claim it makes it easier for their bookings, which usually take place in foreign countries.
“Our main office is in Milan, and most of our clients are from Italy and Spain, so it is rather comfortable for us to quote prices in dollars rather than shillings because that is what they are familiar with,” said one official at Gold Zanzibar.
The authorities, too, seem to be comfortable with dollar use; according to Javed Jafferji, a board member of the Hotel Association of Zanzibar (HAZ), when they collect payments in dollars, they too submit the taxes in dollars.
“Whatever we collect in dollars, we pay to the Zanzibar Revenue Authority (ZRA) in dollars as well. But we do not restrict our customers from paying in foreign currency if they have the shilling,” said Mr Jafferji.
New directive
But this reliance could be short-lived after Tanzania’s Finance and Planning Minister, Dr Mwigulu Nchemba, last week issued a directive aimed at curbing the widespread use of the US dollar within the country.
In his budget speech to the national assembly, Dr Nchemba highlighted the detrimental effects of dollarization, 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.
The Minister expressed concern over the practice of some institutions, including governmental bodies, requiring Tanzanians to pay fees, rent, work permits, licenses, and other charges in dollars.
He emphasised that this situation not only increased the unnecessary demand for foreign currency but also deprived those in need of dollars of essential goods and services from outside the country.
Furthermore, Dr. Nchemba reiterated the legal framework stipulated in Section 26 of the Central Bank of Tanzania Act of 2006, which designates the Tanzanian shilling as the sole legal tender for domestic payments.
Any transactions conducted domestically in foreign currency are deemed an offence under this act.
To address these challenges head-on, the Minister issued a directive effective July 1, 2024, instructing all stakeholders, including public institutions, businesses, civil society organisations, international entities, and individuals, to cease the practice of pricing goods and services in foreign currency.
In February, the Bank of Tanzania governor, Mr Emmanuel Tutuba, said in an interview with The Citizen that the central bank had observed violations of the directives.
“The central bank would like to remind the general public that the government’s directives are still valid and should be adhered to at all times. All prices of goods and services in Tanzania should be quoted in Tanzanian shillings,” he said.
He added: “We have continuously informed the public, including tenants, not to accept the use of foreign currency as payment for rent,” he stressed.
According to him, BoT has also been in talks with the Tanzania Law Society (TLS) not to accept rent contracts whose payment is pegged in foreign currency.
Prices to be paid by tourists or non-resident customers may be quoted and paid in foreign currency, he said, citing such services as accommodation, travel, airport and visa, transit trade, and cargo handling.
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Inside Tanzania’s Life-Saving Birthcare Model
Tanzania is winning the battle against maternal and newborn deaths, as the latest numbers reveal a significant decline.
“Tanzania is committed to reducing maternal and newborn mortality and ensuring safe deliveries as part of the national development plan. The Safer Births Bundle of Care is one of the key strategies supporting this effort,” said Dr. Benjamin Kamala, the Senior Research Scientist at Haydom Lutheran Hospital and Principal Investigator for the program, leading its implementation across five regions in Tanzania.
A groundbreaking study published in the New England Journal of Medicine shows that the innovative health program in Tanzania – centered on regular, on-the-job training for healthcare workers – reduced maternal deaths by 75% and early newborn deaths by 40%. The three-year study, conducted across 30 high-burden healthcare facilities in Tanzania, tracked approximately 300,000 mother-baby pairs under the Safer Births Bundle of Care (SBBC) programme. The programme focuses on improving care for mothers and babies during the day of birth, the critical time when a woman goes into labor and delivers her baby.
Maternal health is a key focus of the United Nations Sustainable Development Goals (SDGs), specifically Target 3.1, which aims to reduce the global maternal mortality ratio to fewer than 70 deaths per 100,000 live births by 2030.
Tanzania’s program combines continuous, simulation-based training for frontline healthcare workers alongside innovative clinical tools to improve labour monitoring (fetal heart rate monitoring) and newborn resuscitation.It also uses data to drive ongoing improvements, ensuring that healthcare workers have the skills, confidence, and competence to manage birth-related complications for both mothers and newborns.
“We work closely with healthcare workers, equipping them with the necessary tools to improve the quality of care, ensuring they can effectively manage both mothers and babies during and after childbirth,” Dr. Kamala said, which helps them build on over a decade of innovative research and collaboration to improve care during childbirth.
“To give you a sense of the scale of the burden of maternal and newborn mortality in Tanzania when the Safer Births Bundles of Care program was in early development in 2015/16, there were around 556 maternal deaths per 100,000 live births and 25 neonatal deaths per 1,000 live births,” he said.
The published study demonstrates the “transformative impact” of the Safer Births Bundle of Care program conducted across 30 hospitals in five high-burden regions of Tanzania, where there were about 300,000 mother-baby pairs.
Maternal deaths at the start of the program were recorded at 240 per 100,000 live births, with postpartum hemorrhage and hypertensive disorders being the leading causes of death, he said. Over the 24-month study period, this number dropped to approximately 60 per 100,000 live births, representing a 75% reduction. The number of newborn deaths – which are primarily due to breathing difficulties and complications related to prematurity – declined by 40% – from 7 deaths per 1,000 live births to 4 deaths per 1,000 live births.
“These results are remarkable,” Dr. Kamala said.
According to Dr. Kamala, the 75% reduction in maternal deaths was not expected, and a key lesson was the important role of the in-situ team simulations – including for postpartum bleeding – with reflective debriefings that trained facilitators led.
“This seems to be a major part of the success of the program,” he said. “We are delighted by these results and hope that other countries adopt and scale the Safer Births Bundle of Care program… Beyond the numbers, the Safer Births Bundle of Care program has fostered a dramatic culture shift in our healthcare system,” he said. “Healthcare workers are now more confident and better equipped to handle birth-related complications for both mothers and babies.”
Maternal death drop
Dr. Kamala attributed the 60-70% reduction in newborn deaths in Geita and Manyara to several factors.
“Firstly, Manyara was the first site for implementation, giving the region more time to adapt and experience the impact of the program. Most importantly, both regions had a high burden of stillbirths and neonatal deaths, making them ideal targets for focused intervention. As a result, newborn deaths decreased by 60-70%, showcasing a clear positive impact on newborn survival,” he said.
Dr. Kamala said another possible explanation is the differences in the culture of practices, where some health facilities reported inaccurate data due to the fear of blame and shame. However, with the project’s implementation, reporting became more accurate after mplementation. Some regions, such as Tabora, reported an increase in the number of referrals to the study hospitals from other care centers after the program was implemented. These were more likely to be late admissions, which increase the likelihood of poor health outcomes, he said.
After the implementation of the program, there was a 40% decrease in newborn deaths within the first 24 hours after birth, according to the study.
Dr. Kamala said Tanzania’s remarkable progress in reducing maternal mortality by 80% is driven by strategic investments and innovative programs focused on improving maternal and child survival rates.
“Over 2,000 new healthcare facilities have been developed, free health services are being provided to expectant mothers and children under the age of five, and emergency obstetric care – including better transport to hospitals in rural areas are helping to ensure timely, life-saving interventions.
“Most importantly, the Ministry of Health works in collaboration with healthcare workers, hospitals, and development partners to strengthen the skills of frontline healthcare workers, which has been a key factor in driving this progress.
“Political leadership, alongside strategic partnerships and financing, has been crucial in driving progress in maternal and newborn health,” he said.
The program was made possible by the support of the Global Financing Facility for Women, Children, and Adolescents, Norad, UNICEF, and Laerdal Global Health, as well as the Ministry of Health and Haydom Lutheran Hospital. Their partnership and investment enabled the scaling of the Safer Births Bundle of Care to 30 hospitals and supported the research. “The government has now scaled the program to over 150 sites, and there are plans for further expansion to three regions this year and then nationally,” he said.
Dr. Kamala outlined key policy recommendations for other governments can adopt to prioritize maternal health.
“Firstly, it focuses on cost-effective and relatively simple interventions that are essential to preventing maternal and newborn deaths. For example, stronger primary healthcare that is delivered in the community and a well-trained healthcare workforce are also critical. Additionally, working in close collaboration with national, regional, and local health authorities is key.”
He said Tanzania’s approach, where the Safer Births Bundle of Care program was successfully scaled and sustained by aligning the initiative with national guidelines for obstetrical and newborn care. In addition, the creation of mentorship programs and regular supervision has helped to sustain the results.
Looking ahead
Tanzania now plans to expand to three new regions in 2025, followed by a nationwide rollout.
The success of the program has attracted interest from other countries, with Botswana, Ethiopia, Lesotho, and Namibia expressing interest in adapting the program to their healthcare system. In Nigeria, the program has already been launched in two states, Gombe and Borno, marking a significant step in its scaling.
Source: allafrica.com
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