TATO Engages Government on Foreign Exchange Regulations Impacting the Tourism Sector

Strategic Stakeholder Dialogue Held at Gran Meliá Arusha

Arusha, Tanzania – April 11, 2025: In a significant move aimed at safeguarding the stability and continued growth of Tanzania’s tourism industry, the Tanzania Association of Tour Operators (TATO), in collaboration with the Tanzania Private Sector Foundation (TPSF), organized a strategic high-level consultative meeting with the Government to discuss the effects of the recently introduced foreign exchange regulations on the tourism sector.

The meeting took place on April 11, 2025, at the prestigious Gran Meliá Arusha, bringing together key stakeholders from both the public and private sectors. The session was chaired by Mr. Elijah Mwandumbya, the Deputy Permanent Secretary at the Ministry of Finance, signaling the Government’s commitment to engaging in meaningful dialogue with the private sector.

TATO: A Champion for the Tourism Industry

This dialogue is a direct reflection of TATO’s core operational pillars:

• Advocacy & Lobbying: Serving as the primary voice of Tanzania’s tour operators, TATO actively engages in policy discussions to protect the interests of its members and to influence a conducive business environment.
• Research & Marketing: TATO conducts extensive research and marketing campaigns to position Tanzania as a competitive and desirable travel destination globally.
• Consultancy & Training: The association empowers stakeholders through training and capacity-building initiatives to enhance professionalism and service delivery.
• Information Sharing: By disseminating timely updates and industry insights, TATO ensures its members remain informed about market dynamics and regulatory changes.

TATO has been at the forefront of advocating for an enabling business environment, especially as the tourism industry recovers and grows post-pandemic. The foreign exchange regulations introduced earlier this year have raised serious concerns among operators who rely heavily on international transactions denominated in foreign currency.

Tanzania’s Tourism Industry: A Key Economic Pillar

The tourism sector is not only a major source of foreign exchange regulations but also a fundamental pillar of Tanzania’s socio-economic fabric. According to updated statistics:

• As of December 2024, Tanzania welcomed over 2.1 million international tourists and 3.2 million domestic tourists.
• These arrivals generated a record-breaking $3.9 billion in tourism revenue, marking the highest annual earnings in the country’s tourism history.
• Tourism now contributes over 17% to Tanzania’s GDP and nearly 30% to Zanzibar’s GDP.

These figures highlight the sector’s enormous potential and the importance of ensuring that new regulations do not stifle its momentum.

Industry Concerns: Impacts of New Forex Regulations

During the meeting, Mr. Wilbard Chambulo, Chairman of TATO and member of the TPSF Governing Council, delivered a comprehensive presentation on the implications of the foreign exchange regulations. He outlined the following key concerns shared by TATO members:

1. Forced Conversion of USD Invoices to TZS

Many international tourism contracts and transactions are denominated in United States Dollars (USD) to align with global industry norms. The forced conversion of these invoices into Tanzanian Shillings (TZS) disrupts established agreements and introduces currency risk that many operators are ill-equipped to manage.

2. Increased Exposure to Foreign Exchange Losses

Due to disparities between the official exchange rate and the parallel market rate, tourism businesses face significant losses when converting foreign currency into TZS. This has a direct impact on profit margins and long-term sustainability.

3. Administrative and Compliance Burdens

The new regulatory landscape has created complexities in financial management, compliance, and tax reporting. Operators now face increased workloads and must navigate between conflicting exchange rate environments, leading to inefficiencies and operational risks.

Mr. Chambulo emphasized that while the tourism industry supports the broader goal of monetary stability, a one-size-fits-all regulatory approach could hinder growth and reduce the sector’s global competitiveness.

In Addition, Mr. Maganga underscored the need to reconsider the regulations, warning that their long-term effects could hinder the sector’s ongoing recovery post-COVID. He called for the exemption of the tourism sector, which is highly dependent on foreign currency transactions.

Broad Representation: A Unified Industry Voice

The meeting was attended by a robust delegation of TATO members and stakeholders, including:

• TATO Board Chairman , Mr Wilbard Chambulo
• TATO Executive Director, Mr Elirehema Maturo
• TATO Treasurer and Board Member
• Representatives from member companies, including Chella & Peacock, Elewana Collection, SOPA Lodges, Kilimanjaro Safari Club, Four Points by Sheraton New Arusha Hotel, Asilia Africa, and Krisha Safaris
• TPSF Executive Director & CEO, Mr Raphael Maganga, serving in a coordinating capacity

This broad representation underscored the unity within the sector and the shared urgency to find pragmatic, tourism-specific solutions to the foreign exchange regulations challenge.

Government Response and Dialogue

Mr. Elijah Mwandumbya, representing the Ministry of Finance, acknowledged the concerns presented and reaffirmed the Government’s openness to constructive engagement with the private sector. He assured attendees that the Ministry would consider the recommendations put forward and explore sector-based adjustments to the foreign exchange framework.

This level of engagement between the Government and the tourism private sector demonstrates a maturing public-private partnership model, where key policy decisions are informed by practical insights from industry players.

A Call for Sector-Specific Reforms

As the meeting concluded, TATO made a formal call for a sector-specific exemption or adjusted regulatory framework that recognizes the unique nature of international tourism operations. This includes:

• Allowing tour operators to continue issuing invoices in USD for international clients
• Providing access to foreign currency at realistic exchange rates
• Establishing a simplified compliance system tailored to the industry’s needs

TATO also proposed the formation of a joint task force involving stakeholders from the Ministry of Finance, Bank of Tanzania, and tourism representatives to further analyze the issue and develop appropriate solutions.

Sustaining Growth Through Dialogue

This engagement is a clear example of TATO’s role as a proactive and solutions-driven organization, consistently seeking ways to protect and promote Tanzania’s tourism interests. Through advocacy, research, training, and information sharing, TATO continues to act as a bridge between policy makers and industry players.

The association reaffirmed its commitment to ongoing collaboration with the Government, emphasizing that the success of Tanzania’s tourism sector is not only vital to TATO members but also to the national economy at large.

As tourism continues to thrive and evolve, policy flexibility and informed regulation will be key to sustaining momentum and ensuring Tanzania remains a world-class destination for generations to come.