Joseph Isangura
Tour operators in Tanzania’s northern regions have expressed strong opposition to recent regulatory changes requiring all payments to be conducted in Tanzanian shillings.
The new regulation, implemented by the government, mandates that all transactions, including permits and other fees, be made in the local currency. This decision has sparked significant concerns among tour operators, particularly due to the fluctuating and often unfavorable exchange rates.
The Communications Manager for the Tour Operators Association Fransisca Masika, highlighted the financial strain caused by these changes. “When we accessed the system to pay for permits, the exchange rate was excessively high. At the Ngorongoro Conservation Area Authority, the dollar rate was 3,000 shillings, while at the Tanzania National Parks (TANAPA), it was 2,715 shillings,” Masika explained.
Tour operators argue that such discrepancies in exchange rates lead to increased operational costs and financial uncertainty. The requirement to convert foreign currency to Tanzanian shillings at inflated rates not only reduces profitability but also complicates financial planning and budgeting.
The regulatory shift is part of broader amendments to the National Payment Systems Act aimed at strengthening the national currency and enhancing government revenue collection. However, stakeholders in the tourism industry believe these measures could have adverse effects on the sector, which is a vital contributor to Tanzania’s economy. The tourism industry has already been struggling to recover from the impacts of the COVID-19 pandemic, and additional financial burdens could hinder its recovery.
ReadMore;Political will spurs dramatic drop in FGM practices
Tour operators are advocating for a more flexible approach that would allow transactions to be conducted in foreign currencies, particularly the US dollar, which is widely used in international tourism. They argue that such flexibility would provide a more stable financial environment and encourage further investment in the sector.
In response to these concerns, government officials have indicated that the regulatory changes are necessary for economic stability and to curb currency manipulation. They assert that the policy will help in stabilizing the Tanzanian shilling and improving transparency in financial transactions. Despite these assurances, the tourism industry continues to push for dialogue and revisions to the policy to ensure that it does not negatively impact the sector’s growth and sustainability.
The ongoing debate between tour operators and the government highlights the need for a balanced approach that supports economic policies while considering the practical challenges faced by key industries. As discussions continue, it remains to be seen whether a compromise can be reached that satisfies both the government’s objectives and the operational realities of the tourism sector.
