This represents a depreciation rate of 6.36% in just over twelve days. According to James Mbatia, Shadow Minister of Finance, it is very likely that, if this depreciation rate persists, the local currency will hit TSD3.000 per USD by August 1st.

Saada Mkuya, the Finance Minister, argues that a strong dollar has affected all major African states and there’s is nothing the government can do to avoid the situation. “We are giving these figures because the price of imported products will keep on rising and that will impact on the cost of living,” she said. Mkuya also explained that high demand for dollars will drain the local money circulation, making it more difficult to implement the budget.

One of the main areas of concern is the production and export of hides. MP John Cheyo argued that increasing tax on exporting raw hides will not be of help the economy. “This tax measure aims at discouraging exporting raw hides but to make hides meaningful to farmers and livestock keepers, the government should plan to establish processing plants locally”, he said.

Source: DAR ES SALAAM Tanzania (Xinhua)