(Dar es Salaam) – Tanzania’s shilling has appreciated nearly 3% against the US dollar over the past month, reflecting economic stability and benefiting sectors reliant on imports such as fuel, vehicles, and pharmaceuticals.
The Tanzanian shilling has shown significant gains against the US dollar in recent weeks, marking a welcome development for industrial manufacturers, vehicle importers, and consumers of essential goods like fuel. Official data from the Bank of Tanzania (BoT) reveals that the shilling’s value increased by approximately 3% over the past month.
On October 25, 2024, the exchange rate stood at TZS 2,703.6 to TZS 2,730.64 per dollar. By November 25, the rate improved to TZS 2,652.84 to TZS 2,652.1. This shift reflects a strengthening of the local currency, with the average exchange rate improving from TZS 2,717.12 to TZS 2,638.97 over the same period. In US dollar terms, the appreciation brings noticeable relief for consumers and businesses reliant on imports.
| Date | Exchange Rate (TZS/USD) |
|---|---|
| October 25, 2024 | 2,703.6 – 2,730.64 |
| November 25, 2024 | 2,652.1 – 2,652.84 |
The strengthening of the shilling is expected to stabilize or reduce the cost of major imported goods, including fuel, vehicles, industrial sugar, pharmaceutical products, steel, and iron. These items constitute a substantial portion of Tanzania’s import expenditure, making the currency’s appreciation a critical factor for economic stability.
Analysts highlight that a strong domestic currency offers more benefits than drawbacks for an import-dependent economy like Tanzania’s. Data shows the country’s total imports reached $16.45 billion for the year ending September 2024, up from $16.10 billion the previous year, driven primarily by refined fuel imports. Meanwhile, exports of goods and services rose by 13.4% to $15.35 billion from $13.54 billion in 2023. This growth was fueled by higher revenues from tourism and exports of gold, tobacco, cashew nuts, and horticultural products.
| Trade Data | 2023 | 2024 | Change |
| Total Imports ($ billion) | 16.10 | 16.45 | +2.2% |
| Total Exports ($ billion) | 13.54 | 15.35 | +13.4% |
University of Dar es Salaam economist Professor Semboja Haji noted that the shilling often strengthens against the dollar following the end of the fiscal year. Seasonal factors such as agricultural exports and peak tourism activities have boosted Tanzania’s foreign exchange earnings, thus supporting the local currency.
“The challenge for our economy, like other African nations, is that our production does not match demand within neighboring markets,” said Professor Haji. “However, seasonal activities like agricultural exports and tourism contribute to bolstering our domestic currency.”
The BoT anticipates the positive trend to continue as demand for US dollars decreases, further enhancing the shilling’s position toward the new year. Tanzania currently holds substantial foreign reserves, totaling $5.41 billion as of September 2024, sufficient to cover 4.4 months of imports, exceeding the national benchmark of four months.
BoT Governor Emmanuel Tutuba emphasized that global economic factors have also played a role. “The stabilization of the US economy has led to lower interest rates, encouraging investors to seek opportunities elsewhere, thereby increasing the supply of dollars globally, including in Tanzania,” he explained. He added that individuals previously holding large amounts of dollars are now converting them to shillings for local transactions, further increasing the supply of domestic currency.