By TZ Business News Staff.
Tanzania’s legal tender, the TShilling and the Zambian legal tender, the ZKwacha will now be used freely in the two countries’ neighboring border towns of Tunduma and Nakonde, in a landmark agreement to foster intra-African trade and investment.
The Tanzania Central Bank Governor Prof. Florens Luoga and his Zambian Counterpart Dr. Denny Kalyalya sign the agreement to effect free movement of the Tshilling and the Zkwacha in the two towns on September 21, 2018, the Bank of Tanzania has announced.
“The Purpose of this agreement is to enable official financial institutions—including commercial banks in the two countries to accept the two currencies without a problem,” a Bank of Tanzania Statement made available to TZ Business News has said.
Prof. Luoga and Dr. Kalyalya will sign the agreement at Tunduma town in Songwe region, the Bank of Tanzania (BoT) has said. Brigadier General Nicodemas Elias Mwangela is to be guest of honor at the signing ceremony. He is the Songwe Regional Commissioner. The signing ceremony will be followed by a public rally.
[The move is nonetheless ‘officialization’ of what has unofficially been going on for years. North eastern Zambia and south western Tanzania share a common border which divides the Nyiha and Nyamwanga tribes living in both countries by almost equal halves. The tribes are historically, culturally and economically intertwined].
The bank of Tanzania says this agreement will ease business between the two countries and stop black marketeering of foreign currency at the border, as well as open a window for Tanzania and Zambia Governments to collect taxes and various other fees from economic activities in the two towns.
The central banks of Zambia and Tanzania have reached this agreement after research and discussions which started in 2017. The research and discussions aimed at fighting illegal foreign currency trading as well as enabling the citizens on both sides of the border to benefit from economic activity, BoT has said.
The landmark agreement is also expected to result in competitive fairness in the foreign exchange market at the border towns between banks and foreign exchange shops (bureau de change)–which will in turn assist central banks in the two countries to control money supply, the statement says.