My Africa Today

The Arusha region, mainly its urban outlets, has been described as an extremely ‘dollar-ized’ precinct, where major and minor transaction are carried out using the American currency. The tendency is said to further weaken the Tanzanian shilling against the US dollar.

This was remarked this week, by the Head of sales, Structured Solution and Global Markets for the Standard Chattered Bank, Lawrence Mafuru, during a one day workshop which was organized by the Bank for its corporate customers an event which took place at The Arusha Hotel conference room, last Tuesday.

According to Mafuru, Arusha leads in the country for being a precinct where the dollar rules the economy and most of the local transactions. “In Arusha practically everything is done in US dollars, people pay their house rents in dollars, hotel rooms are charged in dollars and all retails outlets accept dollars some even insisting the foreign medium of exchange over the local currency.

Mafuru was presenting a paper on ‘Global Markets’ when the issue of local currency fluctuations became inevitable. The Tanzanian Shilling apparently is badly falling against the dollars and for the last two months, this has been a major concern among local people, especially those with a foothold in the country’s economic circles.

“It is all speculation, there is no need for fear, among the major fundamentals of economy is that it does not thrive on speculations.” Assured Mafuru adding that, while the local shilling was far from being stable due to the country’s high import bill, compared to its measly exports, Tanzania still had an edge in the economy, due to its political stability, which as far as he was concerned, it was the most important economic factor.

“Currency fluctuation is a normal thing, not only in Tanzania, but in other countries worldwide.” Pointed out Mafuru, explaining that the 8-10 percent trend has been a regular figure, until recently when due to some contributing factors, the fluctuation shot up to 14 percent. He named the unavoidable factors as being prolonged drought spells and the current electricity power problems.

“But on the other hand, we are also contributing in creating the high but unnecessary demand of the US dollar through entertaining mass usage of the currency, even in trivial matters such as shopping and settling bills, a negative trend which is becoming a ‘popular’ habit, but in reality we are actually shooting ourselves in the foot.” He warned, adding that, “This trend was mostly becoming rampant in Arusha.”

The current exchange rate in Arusha Municipality, by the time we went to press, was around Tsh.1335 against a single dollar. Six months ago in January 2006, the average exchange rate here was around Tsh. 1200 per dollar. As a result most business outlets and landlords here are now insisting to transact in the dollar medium.

Standard Chattered Bank hosted the workshop purposely to educate its Arusha customers on the various products that the Institution was offering, to the customers who were running companies and large businesses. More than 50 such customers attended the occasion.

The workshop was opened by the Bank’s Arusha based, Business Development Manager Mrs Lilian Bulengo, who also presented a paper on corporate Visa cards being issued by SCB. Later that evening, the Bank’s head of sales for Clients Relationships Department, Mr. Anthony Angelo, officially winded up the event.

Standard Chattered, according to the Bank’s Corporate Affairs Manager, Juanita Mramba, has a history of over 150 years, with an extensive global network of 1200 branches, in over 50 countries, employing more than 50,000 people, representing over 90 nationalities in Asia, Africa, Europe, Middle East and Americas.