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The Chanzo Morning Briefing – June 21, 2023.

In our briefing today: Banks or not – which way 10pc local govt loans?; BoT unhappy with public’s use of foreign currencies for domestic payments; US-based energy company Astra Energy Inc. completes feasibility study for energy project in Zanzibar. 

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Dar es Salaam. Good morning! The Chanzo is here with a rundown of major news stories reported in Tanzania on Tuesday, June 20, 2023.

Banks or not – which way 10pc local govt loans?

The debate over the most suitable arrangement for the effective functioning of the ten per cent local government loans continued yesterday during a session organised by The Chanzo at the PSSSF Commercial Complex in the city.

It was one of the three sessions during The Chanzo Specials, a citizen-centred forum by The Chanzo that brought together over 300 participants from across sectors to discuss issues of high public interest.

The forum, which also discussed the state of public accountability in the country and the analysis of the government budget for the 2023/2024 financial year, was made possible thanks to the support from the Good Financial Governance Programme implemented by GIZ and funded by Germany, Switzerland, and the European Union (EU).

The discussion around what arrangement works best in ensuring the ten per cent local government loans realises its goal of empowering vulnerable groups occurred at a time when the government has suspended the issuance of the loans to pave the way for review.

Full story here.

BoT unhappy with public’s use of foreign currencies for domestic payments

The Bank of Tanzania (BoT) is not pleased with the public’s use of foreign currencies for domestic payments of goods and services, which it says goes against the public notice issued in August 2007 and December 2008.

In a statement on Tuesday, BoT reminded the public that the notice is still valid, demanding that all prices of goods and services in Tanzania should be quoted in Tanzanian shillings.

“These pertain to rent for land, housing and office; fees for education; medical services, equipment and reagents; transport, logistics and port services; electronic equipment and telecommunications services,” the bank said.

Tourists or non-resident customers can however pay for various goods and services using foreign currency. BoT said no resident should be forced to pay for a good or service in foreign currency as the Tanzanian shilling is the only legal tender.

The bank’s move has been interpreted as the government’s attempt to strengthen control of foreign currency flows in the country. The announcement comes almost two weeks after the government admitted that it undergoes a shortage of dollars, a crisis facing many countries worldwide.

Due to disruptions in the global oil supply and other essential commodities such as fertilisers, Tanzania faces a substantial import bill compared to its foreign currency earnings from exports.

According to the latest data from BoT, the current account deficit for the year ending April 2023 has increased to US$5.29 billion, compared to the deficit of US$2.9 billion recorded in April 2022.

The deteriorated balance of payment also erodes the shilling value, meaning Tanzania’s debt will also increase because of currency issues.

In a move that responds to some of the challenges in the market, On May 31, 2023, BoT released a directive on foreign exchange operations in the country, requiring transactions exceeding US$1,000,000 must be conducted through banks at prevailing market prices. 

Transactions by a single customer in a day will be aggregated to determine this amount, the bank directed.

The directive also prohibits trading with unregistered international currency traders and requires currency dealers to follow procedures for recording customer information. 

Additionally, all Letters of Credit (LCs) for transit cargoes must be funded using foreign exchange from the respective destination countries.

US-based energy company Astra Energy Inc. completes feasibility study for energy project in Zanzibar

A US-based energy company Astra Energy Inc. has announced that it has completed its feasibility study to secure 207 acres of land on a 33-year renewable lease with the government of Zanzibar for the Zanzibar Clean and Renewable Energy Park project (ZCREP).

Tuesday’s announcement followed a meeting between the company’s officials and those from the government of Zanzibar, which included the semi-autonomous archipelago’s President Hussein Mwinyi, during which Astra presented the completed feasibility study for the project.

A statement released on Tuesday quoted Tony Thompson, Astra’s Vice President of Electrical Power Generation, saying: “This project will generate green, long-term, sustainable revenue for the Company and deliver value to shareholders while creating value for the residents of Zanzibar by providing a stable source of clean and renewable energy on the island.” 

Astra intends to own and operate the project as an independent power producer, selling the power to the Zanzibar Electricity Corporation (ZECO), Zanzibar’s state-owned utility, via a long-term power purchase agreement. 

The combined solar and waste-to-energy project will generate 50 MW of clean and renewable energy on Unguja Island. 

The land package consists of 199 acres in the Kibele district for the solar PV portion of the project and an additional 8 acres adjacent to the solar park and within the confines of the Kibele landfill for the waste-to-energy facility.  

The project will also consume 300 tons of municipal solid waste per day, reducing the stress on the Kibele landfill, the island’s only dedicated receptacle for waste. 

Additionally, a battery energy storage system component will be installed along with the solar PV plant to both help stabilise the power supply and drastically reduce Unguja Island’s reliance on a single 100-MW submarine cable from mainland Tanzania, which is currently the island’s sole source of normal power.

Astra said Tuesday that it will now commence detailed engineering design and required environmental impact studies. Construction of the facility is expected to start in 2024, reaching commercial operation in 2025. 

This is it for today, and we hope you enjoyed our briefing. Please consider subscribing to our newsletter (see below) or follow us on Twitter (here), or joining us on Telegram (here). And in case you have any questions or comments, please drop a word to our editors at

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  1. BoT unhappy with public’s use of foreign currencies for domestic payments


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