Tanzania’s Money Service Businesses Regulations Get an Overhaul

The government of Tanzania has announced significant changes to the Foreign Exchange Regulations (G.N. No. 294 of 2022) aimed at streamlining foreign exchange regulations and promoting transparency in the industry.

New Penalties and Relaxations

As of September 1, 2023, the amendments introduce new penalties for non-compliance with the regulations. Money service businesses, including banks and financial institutions, will no longer face daily penalties of up to TZS one million (approximately USD 400). Instead, violators can now expect a lumpsum fine of TZS four million (approximately USD 1,600), imprisonment for up to 14 years, or both.

Stricter Conditions for Foreign Credit Accommodation

The amendments also introduce stricter conditions for foreign credit accommodation (FCA), including restrictions on interest rates and charges. This is expected to have a significant impact on money service businesses operating in Tanzania, particularly those involved in foreign debt servicing.

Key Changes

• Deletion of provisions regulating interest rates, charges, and conditions for FCA
• Relaxation of rules governing the buying and selling of foreign currency
• Introduction of stricter conditions for FCA

Impact on Industry

Industry insiders believe that these changes will encourage greater transparency and accountability in the sector. “The previous penalties were deterrents to compliance,” said an industry source, who wished to remain anonymous. “These changes will encourage greater transparency and accountability in the sector.”

Government’s Call to Action

The government has urged all money service businesses operating in Tanzania to review the amended regulations and ensure compliance with the new provisions. Credit institutions both inside and outside the country, borrowers, and stakeholders in the foreign exchange market are encouraged to consult with regulatory authorities for further information and guidance.

Contact Information

For more information, please contact:

• Tenda Msinjili
• Imani Mselle
• Linda Natai