Bank of Tanzania


tanzania-Prof Florens Luoga .jpg

 Prof. Florens Luoga

Headquarters Dar Es Salaam
Established 1966
Currency Tanzanian shilling - TZS (ISO Code )

The Bank of Tanzania, is the central bank of the United Republic of Tanzania and was established following the decision to dissolve the East African Currency Board (EACB), which under the British Colonial rule, provided for and controlled the supply of currency in the East Africa protectorate. The board operated in Tanzania Mainland, Zanzibar, Kenya and Uganda. The board issued its own currency notes and coins for circulation in East Africa.

Following the disbanding of the EACB, the National Assembly of Tanzania enacted the Bank of Tanzania Act, 1965, in December 1965, which provided the statutory basis of the functioning of the Bank, which commenced its operations on June 14, 1966.

The Bank was empowered to perform all traditional Central Banking functions. In addition, the bank assumed special role in the context of development, with particular focus on the transformation of the rural economy, industrialization, and to address the persistent weakness in the Balance of Payments.

The Bank of Tanzania Act was amended in 1978 to incorporate the Development Functions. In order to be able to discharge on the developmental roles four special funds were established namely; The Rural Finance Fund, The Industrial Finance Fund, The Export Guarantee Fund, and The Capital and Subsidy Funds, intended to provide refinance and offer guarantee facilities to Banks and other financial institutions against their loans and advances to specified sectors of the economy.

The Bank of Tanzania act was further amended in 1995 and 2006 to accommodate developments in the economy, particularly in the financial sector. Under the new act, the principal functions of the Bank shall be to exercise the functions of a central bank and, without prejudice to the generality of the foregoing, to formulate, implement and be responsible for monetary policy, including exchange rate policy, to issue currency, to regulate and supervise banks and financial institutions including mortgage financing, development financing, lease financing, licensing and revocation of licenses and to deal, hold and manage gold and foreign exchange reserves of Tanzania.

The Bank of Tanzania headoffice is in Dar es Salaam and it operates 4 branches, three in the Tanzania Mainland, and one in Tanzania Zanzibar.

About the Bank

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Subsidiary Functions of the Bank

Apart from the primary function, the Bank of Tanzania has important subsidiary central banking functions.

 1. The Bank of Issue

The Bank has the sole right to issue notes and coins in Tanzania for the purpose of directly influencing the amount of currency in circulation outside banks, thereby providing the economy with sufficient, but if possible, non-inflationary liquidity.

 2. The Bankers’ Bank

This function includes the acceptance of deposits to act as prudential reserves for these banks (i.e., the Minimum Reserves), the willingness to discount commercial and government paper, and the commitment to act as lender of last resort to these banks. It also involves the provision of central clearance facilities for interbank transactions.

 3. The Governments’ Bank

The Bank is the banker and the fiscal agent for the Governments, and may be the depository of the Governments. The Bank may make temporary advances to the Governments through its overdraft facility, subject to repayment within 180 days and through purchases (direct or rediscounting) of treasury bills issued by the Governments, which mature not later than 12 months from the date of issue. The total amount outstanding at any time of advances made in this manner shall not exceed one eighth of the average budgeted revenues (average of the actual collected revenues of the previous three fiscal years, excluding loans, grants, other forms of economic aid, and all borrowing, whether short-or long-term) of each Government.

 4. The Advisor to the Governments

The Bank may advise the Governments on any matter relating to its functions, powers, and duties. The Bank may also be requested to advise the Governments on any matter related to its functions, powers, duties, the credit conditions in Tanzania, or any proposal, measures, and transactions relating thereto.

 5. The Guardian of the Country’s International Reserves

The Bank is the depository of the official external assets of Tanzania, including gold and foreign currency reserves. Guarding international reserves may imply the determination of buying and selling rates of gold and foreign exchange in foreign exchange markets and/or the buying and selling of reserve assets for the purpose of sustaining the national currency’s external value. It also includes reserve management, with a view to the prudential investment of the funds, with due regard to safety, liquidity, and profitability, and external debt management.

 6. Supervision of Banks and Financial Institutions

In general, this activity involves ensuring that commercial banks and other financial institutions conduct their business on a sound prudential basis and according to the various laws and regulations in force. It includes the supervision of banking conduct and the licensing of financial institutions.

According to the Banking and Financial Institutions Act of 1991, and the new BOT Act, the main responsibilities of the Bank of Tanzania are:

a) implementation of prudential controls concerning capital adequacy, liquidity, concentration of credit and risk diversification, asset classification and provisioning, and prohibited activities;

b) licensing of banks and financial institutions;

c) facilitation and monitoring of a Deposit Insurance Fund, the purpose of which is the protection of small depositors; and

d) modification and monitoring of the Minimum Reserve Requirements and foreign exchange exposure.

 7. Promotion of Financial Development

This refers to the establishment of an effective financial system, with the aid of which financial transactions necessary for the smooth functioning of the economy can be carried out with a minimum amount of cost and time involved. In this connection, the Bank has to be a facilitator of advanced clearing and transfer systems. It also implies that the necessary banking services, as, for example, deposit facilities and loan facilities, are made available. Included here is also the availability of certain specialised institutions, which could be represented, for example, by an industrial development bank and/or an agricultural development bank and micro-finance institutions, and the facilitation of a money market, a capital market, and a foreign exchange market.

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The Bank of Tanzania Act

The Bank of Tanzania is the central bank of the United Republic of Tanzania. It came into operation on June 14th 1966, under the Bank of Tanzania Act, 1965. The Act empowered the Bank of Tanzania to perform all the traditional central banking functions. The Bank of Tanzania Act, 1995 replaced the earlier Act with the primary objective of establishing monetary conditions conducive to Price Stability over time. The objective is to formulate and implement monetary policy in line with the Bank’s mission to maintain price stability that is conducive to the attainment of financial and macroeconomic stability, with the objective of promoting a high and sustainable rate of economic growth.

The Bank of Tanzania Act, 2006 replaced the 1995 Act. The new Act among other issues, provide for more responsive regulatory role of the Bank of Tanzania in relation to the formulation and implementation of monetary policy, and the supervision of banks and financial institutions.

PDF icon Bank of Tanzania Act, 200688.87 KB
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Vision, Mission and Values

Our Vision:

"To be a world-class model central bank focused on its core objectives with a highly qualified and motivated staff that has access to the state-of-the-art technology".

 Our Mission:

"To maintain price stability that is conducive to the attainment of financial and macroeconomic stability conducive to a balanced and sustainable growth of the national economy of Tanzania".

 Value Statement:

“We are committed to maintaining high standards of corporate integrity and social responsibility. Sharing of knowledge and experiences openly within and across our business shall be of paramount importance. In striving for excellence, we shall train and empower staff and focus resources on performance initiatives that deliver desired results. Those results include the promotion of the development of a strong, modern and efficient financial system to serve the national economy of Tanzania.” 

The Bank’s core values are specified as follows:

i. Creativity

 We put emphasis on generating workable and innovative ideas and techniques to improve current practices or processes; we exploit new technologies to create better ways of conducting our business and create a conducive environment in which every member of staff questions status quo, generates new ideas and learns constantly.

ii. Empowerment

We seek to improve effectiveness and efficiency by creating a framework within which members of staff at all levels can exercise control over their work and take responsibility for their actions. Through appropriate leadership/managerial practices and structures, we take deliberate steps to develop our staff, involve them in finding solutions to specific issues and problems and create a shared vision and corporate values.

 iii. Accountability

As supervisor and regulator of the financial system we respond appropriately to stakeholder concerns. We take responsibility and ownership of all that we do at corporate and individual employee levels; we build the required capacity and create the enabling environment for staff to meet performance standards, own up the results of their actions, learn and innovate effectively on the basis of those outcomes/results.

 iv. Teamwork

We expect our staff to be team players. We believe in teamwork to harness multiple skills and experiences of our staff to accomplish key work objectives and promote cooperative behavior among staff. We seek contributions of all staff to improve quality of outputs and organizational effectiveness. We shall carefully select team members, set realistic goals for teams, assess and recognize their performance as appropriate.

 v. Excellence

 We seek the highest quality of performance possible in all that we do. To achieve this, we set directions and clear performance goals in a participatory manner. We create requisite structures, employ appropriate management styles and invest heavily in training and development of our staff to enable them attain desired levels of professionalism necessary for achieving excellence in their jobs. We assess regularly employee performance and recognize extraordinary achievements through a rigorous procedure.


Microsoft Office document icon BOT- Vision, Mission and Values29 KB
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Bank of Tanzania Reports

The Bank of Tanzania publishes the following reports in effort to promote public awareness and transparency on the economic policies and the economic performance/situation.

  • Annual Economic Report: The Bank of Tanzania Annual Reports provides a comprehensive cover-up on the economic situation with special reference to financial developments and the policies pursued by the Bank, and the Bank’s operations and financial statements during a financial year (eg. 2005/06). The publication also contains time series data on macroeconomic indicators.
  • Monetary Policy Statement: The monetary policy statement reports produced by the Bank of Tanzania focuses at providing review on; macroeconomic performance, the monetary policy framework and implementation, targets and future prospects. The report is prepared and released semi annually - in January and June and is presented and discussed in the Parliament
  • Quarterly Economic Bulletin: The Bank of Tanzania Quarterly Economic Bulletin reports on: Output and Price developments; Monetary and Financial developments; External Sector developments; Economic developments in Tanzania Zanzibar; and on International Economic Outlook. The report provides annual and quarterly statistical on macroeconomic indicators and brief explanation behind the developments in the indicators.
  • Monthly Economic Report: The Monthly Economic reports provides monthly review on inflation developments, monetary and financial developments, and external sector developments.

The reports are available from the Bank of Tanzania website.

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Major National Indicators

Socio Economic Indicators

Population (2002 Census): 34.2 million
Population growth rate: 1.8 percent
Per Capital GNP: Estimated at US $ 246 (2001) (US$1 = TZS 1051 in Jan 2005)
Per Capital GDP: Estimated at US$ 251 (2001) (US$1 = TZS 1051 in Jan 2005)

25,000 persons per doctor Infant mortality Rate (2000): 93 per 1000 live births Child under Five Mortality Rate (2000): 49 per 1000 live births

Maternal Mortality Ratio (2000): 1100 per 100,000 live births

Adult Illiterate Rate (15+ years old ) percent (2001) 32 Female 15 Male
Gross primary Enrollment % of age group (2000) 65 Female 65 Male
Gross Secondary Enrollment % of age group (2000) 5 Female 6 Male

Physical Asset Security
Access to improved drinking water source (2000) 54 percent
Access to improve sanitation (2000) 90 percent

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External Sector

These are statistics related to the exports (fob) and Imports (cif) of goods and services, the trade balance, the interregional trade, the foreign current and capital accounts with and without grants, the intra - regional trade, the exchange rate, stock of foreign debt, debt service and the overall balance of payment.

PDF icon Balance of Payments70.25 KB
PDF icon Exchange rates47.3 KB
PDF icon External Debt Development68.84 KB
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PDF icon BALANCE OF PAYMENTS 2007 - 2012.pdf196.75 KB
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Indicators of Convergence

Indicators of Convergence

At its 26th ordinary session held in Algiers in September 2002, the Assembly of Governors of the Association of African Central Banks (AACB) adopted the African Monetary Co-operation Programme (AMCP). The implementation of this Programme is expected to lead to the establishment of a single monetary zone with a common currency and a common Central Bank at the continental level, by the year 2021. In this regard, the following framework for macro-economic convergence was adopted:

  • Harmonization of macroeconomic and statistical concepts;
  • Observance of the underlisted convergence criteria by the year 2015:

Primary criteria:

  • Overall budget deficit (excluding grants) / GDP ratio < 3%;
  • Inflation rate < 3%;
  • Reduction of Central Bank financing of budget deficit;
  • External reserves 6 months of goods and services imports.

Secondary criteria:

  • Elimination of domestic arrears and non-accumulation of new arrears;
  • Tax revenue / GDP ratio 20%;
  • Salary mass / total tax revenue ratio 35%;
  • Maintaining of real exchange rate stability by each country;
  • Public investments / tax revenue ratio 20%;
  • Maintenance of positive real interest rate.

The African Monetary Cooperation Program (AMCP) Convergence Criteria

The available statistics indicate that Tanzania is converging towards the statistical benchmarks under the AMCP. The convincingly performing indicators include Inflation, the external reserve position (performed above the AMCP criteria), the Central Bank financing of the budget deficit, public investment to tax revenue ration , and domestic arrears. The achievements are in line with the recently recorded robust macroeconomic performance of the Tanzanian economy as reflected in real GDP growth, which grew by 6.8 percent in 2005 and price stability.

Tanzania is implementing exchange rate and interest rate policies that are in conformity with the internationally and AMCP recommended standpoints. The rates are both market determined. The real interest rate recorded negative rates of less than one and is expected to improve to realize positive rates as financial sector continues to strengthen. Exchange rate is freely floating with least interventions from the Central Bank to iron out unusual trends.

The Bank of Tanzania monetary policy stance is consistent with the objective of maintaining at “zero” level, the Central Bank financing of the budget deficit, intended to enforce disciplinary in government spending and encourage government to borrow from the private sector, but without crowding out other sectors of the economy.

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Money and Credit

The Bank of Tanzania receives monetary statistics reports from the deposit money banks, mainly the balance sheets, statutory minimum reserves reports, the report on foreign assets cover against foreign currency deposits, savings and lending interest rates and for some banks, specific information as it may be required for the purpose of giving further details on some items on the general reports or for purpose of giving projections. All this are consolidated to obtain Standardized Report  for Other Depository Corporations. This report is then combined with the Standardized Report for monetary authority to obtain the depository corporation survey. 

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Public Finance

The public finance statistics are the statistics related to central government operations (i.e Total receipts, government expenditures and foreign aid). Under this category  information provided are those on Government Total Revenue (Fiscal receipts and Grants), Expenditure (Recurrent and Development), and Balances. The source of Public Finance Statistics is the Ministry of Finance/Treasury of the United Republic of Tanzania.

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Geographic coordinates:  Tanzania lies mostly between latitudes 1° and 12°S, and longitudes 29° and 41°E (The most Northerly point is Bukoba at 1°S and Mtalika at 12⁰ S is the most Southerly point. Kigoma at 29⁰ East of Greenwich is the most westerly point and Mtwara is the most easterly point along 41⁰ East of Greenwich).

Area: Tanzania has the surface area of 947,300 sq. km, out of which 885,800 sq. km is the land area and 61,500 sq. km areas under inland bodies of water and some coastal waterways.

Land boundaries: Total length of land boundaries is 3,861 km, of which border with Burundi has the length of 451 km, Democratic Republic of the Congo 459 km, Kenya 769 km, Malawi 475 km, Mozambique 756 km, Rwanda 217 km, Uganda 396 km and Zambia 338 km.

Coastline: 1,424 km.

Maritime claims: Exclusive economic zone not exceeding 200 nautical miles (nm) and territorial sea of up to 12 nm.

Climate: Varies from tropical climate along coast to temperate in highlands. As this country lies near the equator, the climate is hot and humid. Tanzania has two major rainfall regions. One is uni-modal (December–April) and the other is bi-modal (October–December and March–May). The former is experienced in southern, south-west, central and western parts of the country, and the latter is found to the north and northern coast. In the bi-modal regime the March–May rains are referred to as the long rains, whereas the October–December rains are generally known as short rains.

Terrain: Tanzania is mountainous in the northeast, where Mount Kilimanjaro, Africa's highest peak, is situated. Highlands in the southwest and to the north and west are the Great Lakes of, respectively, Lake Victoria (Africa's largest lake) and Lake Tanganyika (the continent's deepest lake); to the southwest lies Lake Nyasa. Central Tanzania comprises a large plateau, with plains and arable land.

Elevation extremes: The lowest point is Indian Ocean at 0 meter and highest point is Mount Kilimanjaro at 5,895 meter above sea level.

Natural resources: hydropower, gold, diamonds, coal, iron, uranium, nickel, chrome, tin, platinum, coltan, niobium, Tanzanite, the rare earths oxides and natural gas.

Land use: 10.8 percent of land area in Tanzania is arable, 39.5 percent under agricultural activities, 1.5 percent is under permanent crops and 38.9 percent forests and woodland.

Irrigated land: 1,840 sq km (2008)

Population: 44,484,857 (2011 Est.)

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Official currency is the Tanzania Shilling (TZS). The monthly average exchange rate was 1 US dollar to 1,580.5 Tanzanian Shillings (November 2012)

Major Production

Agriculture makes up the major portion of the Tanzanian economy. It accounts for almost the quarter of GDP, 20 percent of merchandise exports, is the main source of food and employs approximately 70 percent of the labour force. It has linkages with the other sectors of the economy through agro-processing, consumption and exports, providing raw materials to industries and providing market for manufactured goods.

  • The major domestically consumed crops include: maize, sorghum, millet, rice, wheat, pulses (mainly beans), cassava, potatoes, bananas and plantains
  • Major export crops include: coffee, cotton, cashew nut, tobacco, sisal, pyrethrum, tea, cloves, horticultural crops, oil seeds, spices and flowers.

The nation has many natural resources including minerals, natural gas, and tourism. Tanzania has vast amounts of minerals including gold, diamonds, coal, iron, uranium, nickel, chrome, tin, platinum, coltan, niobium, and others. Tanzania is the third-largest producer of gold in Africa after South Africa and Ghana. The country is also known for Tanzanite, a type of precious gemstone that is found only in Tanzania. Tanzania has one of the largest rare earths oxides deposits outside of China. It has also made five onshore and shallow water discoveries of natural gas fields in the vicinities of Songo Songo Island, Mnazi Bay, Mkuranga, Kiliwani North and Nyuni. Out of five discoveries, only two gas fields, Songo Songo and Mnazi Bay are producing, as Mkuranga and Nyuni gasfields have not been assessed substantively to determine the commerciality of both reservoirs.

The mineral sector started to pick-up slowly in the late 90s; major discoveries are announced regularly. However, the mineral sector has yet to start contributing significantly to the overall Tanzanian economy, and industry is still mainly limited to processing agricultural products and light consumer goods.

Unlike minerals, the contribution of the tourism sector to the Tanzanian economy is steadily rising year after year. Tanzania is the home of the world-famous Kilimanjaro, Africa's highest mountain. The country has dozens of beaches such as those found in Zanzibar and national parks like the Serengeti and the Ngorongoro Conservation Area. Other smaller parks, such as Mikumi National Park, which is located near Dar es Salaam, also contribute to the economy of the country.

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Tanzania, officially the United Republic of Tanzania is the country that was formed by the union of Tanganyika (current referred as Tanzania Mainland) and Zanzibar (Unguja and Pemba) in 1964. It is located in East Africa, bordered by Kenya and Uganda to the north; Rwanda, Burundi and the Democratic Republic of the Congo to the west; and Zambia, Malawi and Mozambique to the south. The country's eastern border lies on the Indian Ocean. The official capital of Tanzania is Dodoma, where the country's parliament and some government offices are located. Dar es Salaam, the major seaport for the country and its landlocked neighbors, is the country’s principal commercial city and de facto seat of most government institutions. Tanzania is divided into thirty administrative regions, twenty-five in the mainland and five in Zanzibar (three in Unguja, two in Pemba).

Of the five East African countries (i.e. Kenya, Uganda, Burundi, Rwanda and Tanzania), Tanzania is the biggest by area. The country has a spectacular landscape of mainly three physiographic regions namely the Islands and the coastal plains to the east; the inland saucer-shaped plateau; and the highlands.

The Great Rift Valley that runs from north east of Africa through central Tanzania is another landmark that adds to the scenic view of the country. The rift valley runs to south of Tanzania splitting at Lake Nyasa; one branch runs down beyond Lake Nyasa to Mozambique; and another branch to north-west alongside Burundi, Rwanda, Tanzania and western part of Uganda. The valley is dotted with unique lakes which include Lakes Rukwa, Tanganyika, Nyasa, Kitangiri, Eyasi and Manyara. The uplands include the famous Kipengere, Udzungwa, Matogoro, Livingstone, and the Fipa plateau forming the southern highlands. The Usambara, Pare, Meru, Kilimanjaro, the Ngorongoro Crater and the Oldonyo Lengai, all form the northern highlands.

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