It`s time to tame `dollarisation`

BabuK · 2011-07-03T15:48:45+00:00

The Bank of Tanzania (BOT) might not agree with what is really happening. We at The Guardian on Sunday might not also agree with it if we have to stick to the characteristics of a dollarised economy. But, the reality on the ground forces us to believe that Tanzania is slowly becoming a nation of unofficial dollarisation. Dollarisation occurs when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency. The term is not only applied to usage of the United States dollar, but generally to the use of any foreign currency as the national currency. If the above definition has to be followed and respected, we are in a dollarised economy. We pay Digital Satellite Televisions monthly bills in US dollars, we pay rents in dollars, we pay school fees in dollars, we buy books in dollars and many more. Though finally we end up paying in local currency, the truth is that the prices are pegged in US dollars, whereby you are required to pay in local shillings basing on the prevailing exchange rates of that particular time. For years, this has been the trend in our country and whoever pays in dollars is sometimes considered a well exposed person. In this country, its easy to buy any amount of dollars without even showing proof of why you need the foreign currency. But, the truth is that under the current system of prices being pegged in dollars, its the local consumers who are really feeling the pinch, especially when the shilling is depreciating alarmingly as it is now. In simple mathematics, if last year your DSTV monthly bill was $70 at the time when the shilling was trading at $1,400, what you spent to watch Super Sport channel or Cable News Network was Sh98,000. But today, the very same service is costing you Sh115, 500 per month. This is not because DSTV has increased its price. It is mainly because the shilling has been depreciating its value whereby currently it is trading at Sh1650. It is the same for a tenant whose rent is pegged to the dollar or a parent who pays school fees in foreign currency. But why should you be charged in US dollars, but pay in local currency? In a country like South Africa, it is impossible to find any service being pegged to the dollar, let alone using the US dollar as a legal tender in any transactions. But, in Tanzania, a land of broken rules and regulations, the dollar triumphs at the expense of locals. We, at The Guardian on Sunday strongly demand the intervention from the Bank of Tanzania and the Ministry of Finance to end this shameless business in our country. This is not what liberalisation is about, but it is just another failure of those tasked by the duty to oversee the monetary rules and regulations in our country. Are we more liberal than South Africa, Ghana or India? Not really, but sometimes we want the people to believe so. Its time to end this unofficial dollarisation of our economy. SOURCE: GUARDIAN ON SUNDAY EDITORIAL

Thread starter BabuK
Start date Jul 3, 2011

BabuK

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Jul 3, 2011

CottonEyeJoe

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It`s time to tame `dollarisation`

BabuK

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CottonEyeJoe

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