New amendments to Tanzania’s Foreign Exchange Regulations 2023

  • Legal Development 13 September 2023 13 September 2023
  • Africa

  • Finance

In recent months, we have witnessed discussions regarding the application of the Foreign Exchange Regulations, G.N. No. 294 of 2022 (the Regulations). The Regulations were published on 13 May 2022 and made under section 6 (1) of the Foreign Exchange Act of 1992 (the Act). The Regulations govern all matters relating to, among other things, dealing in foreign currency, current account transactions and capital and financial account transactions.

For background into the Regulations, read our overview article published in May 2022

The Regulations were amended on 1 September 2023, through the Foreign Exchange (Amendments) Regulations, G.N. No. 622 of 2023 (the Amendments). The Amendments have brought some significant changes to the Regulations, which we summarise below:

Amendments to penalties

There were significant penalties which could be imposed on banks/financial institutions and borrowers for non-compliance with the Regulations. The penalties that were previously imposed in the Regulations are set out below:

  • A bank or financial institution that receives proceeds of foreign credit accommodation (FCA) and fails to submit the required documents for registration to the Bank of Tanzania (BOT) within 14 days would be liable to a penalty of TZS one million (approx. USD 400) for each day the FCA remains unregistered.
  • A bank or financial institution must not facilitate foreign debt service (i.e., allow for repayment of FCA) before the FCA is assigned a debt registration number. If a bank or financial institution contravenes this provision, they would be liable to a penalty equivalent to 10% percent of the amount externalized.  
  • A bank or financial institution that fails to submit the relevant FCA subsequent transactions to the BOT, will be liable to a penalty of TZS one million (approx. USD 400) for each day the failure to submit continues.
  • Where a borrower does not submit the relevant documents to the bank or financial institution within the required timelines set out in the Regulations; or  the loan proceeds are paid by a lender directly to the supplier of machinery, equipment or any other goods and services without involvement of a bank or financial institution registered in Tanzania and the FCA remains unregistered for more than 14 days, a penalty of TZS one million (approx. USD 400) would be imposed on the borrower for each day the FCA remains unregistered.

The Amendments have repealed the aforementioned penalties and replaced them with the penalties provided in the Act, which are:

  • a lumpsum fine of TZS four million (approx. USD 1,600); or
  • imprisonment for a term of up to 14 years; or
  • both a fine and imprisonment.

Conditions for FCA

Regulation 26 of the Regulations dealt with interest rates, charges and conditions for FCA. The Amendments have deleted Regulation 26 and substituted it with a provision stating that the BOT shall not register a FCA which contains the following unfavourable terms and conditions:

  • interest rates and other charges on FCA which do not reflect the prevailing market conditions for the relevant currency of borrowing; and
  • conditions precedent which requires the borrower to open foreign currency account(s) outside the United Republic.

Dealing in foreign currency

Under Regulation 3 (7) of the Regulations, an exporter was obligated to make a sale of foreign currency through a bank or financial institution where he maintains an account relationship. Furthermore, under Regulation 3 (8) of the Regulations, a bank or financial institution was prohibited from buying foreign currency from an exporter with whom it has no account relationship. The Amendments have deleted both of these provisions allowing (a) exporters to make sales of foreign currency through banks or financial institutions of their choice; and (b) banks or financial institutions to buy foreign currency from exporters with whom they have no account relationship.


Amongst other things, the penalties previously stipulated in the Regulations encouraged noteworthy discussions between banks, financial institutions and stakeholders which ultimately led to the Amendments being published. We encourage credit institutions both inside and outside Tanzania, borrowers, and stakeholders in Tanzania’s foreign exchange market to review the Amendments alongside the Regulations to ensure compliance with the provisions therein.

Should you require further information, please do not hesitate to contact Tenda Msinjili, Imani Mselle or Linda Natai.  


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