BoT explains cross-border currency use reciprocity

23Sep 2018
The Guardian Reporter
Guardian On Sunday
BoT explains cross-border currency use reciprocity

THE Bank of Tanzania (BoT) and the Bank of Zambia (BoZ) have signed a contract to allow the use of their currencies in both countries specifically for towns around the border (Tunduma and Nakonde) in order to address challenges facing traders at the border points.

Speaking at the signing ceremony held at Tunduma primary school, BoT Governor Prof. Florens Luoga said the agreement aims to remove currency challenges facing business people at the area.

 BoT has responsibility to monitor economic activities at border points and its challenges and then find solutions because most traders in the area were conducting currency business informally.

By allowing the use of each country’s currency on the other side of the border, it will help traders to conduct transactions in the currency they wish and that will help the government avoid revenue loss as it was the case before, he stated.

People living in Tunduma and Nakonde towns interact in various social activities and therefore the two governments will benefit from legalization of using either currency, he said.

 The procedure is not new to Tanzanians because it is also used in Namanga and in other border points, he pointed out, noting that the agreement was likely to help both countries obtain accurate financial data of economic significance.

On his part the BoZ Governor, Denny Kalyalya, said the agreement will enable the Tanzanian currency to be used in Zambia and Zambia's currency will be used in Tanzania and deposited in any bank.

Kalyalya said that such arrangement will help to eliminate illegal currency trading that was being carried out at the border points.

He said the situation will be beneficial to financial institutions and therefore advised banks to be willing to receive either currency, to eliminate the loss of money in the hands of traders.

Tunduma State MP Frank Mwakajoka said both governments should provide education to traders to avoid conflicts as ordinary people may not be too familiar with how the new accord will operate.

He said that if people are given correct education on how the agreement works there would be no challenges from traders and any further violation of the rules.

He said the process would help even simplify the government's revenue collection and that it is likely that the collections will be doubled.

Songwe Regional Commissioner,  Brig.Gen. Nicodemus Mwangela (rtd) said the two governments’ decision on reciprocal use of currencies will help to stimulate economic activities in the border zone.