On 21 November 2018, Tanzania’s central bank said it had carried out surprise inspections of foreign exchange bureaus in Arusha as part of a crackdown on illegal currency trading and money laundering.
The operation took place on Monday in the northern tourism and gemstone trading hub, with soldiers and other security forces deployed so several bureaus could be checked at the same time, according to the bank’s statement.
Governor Forens Luoga said the institution had seen a rise in unlawful foreign exchange bureaus and money laundering activity routed through the sector. He described the network as “vast and powerful”.
The central bank said Tanzania has 110 licensed foreign currency bureaus. It also said it had suspended the issuance of new licences for the past three months while it carried out thorough inspections of existing retail bureaus.
Luoga said any bureau found to be operating illegally would lose its licence.
The move drew political criticism after opposition figures accused the government of involving the military too deeply in the economy. Earlier in the month, the army had also been deployed to collect cashew nut harvests after the government rejected low prices offered by private buyers.
Zitto Kabwe, the leader of the opposition ACT-Wazalendo party, said on Twitter: “I am deeply shocked by the deployment of soldiers at all foreign exchange bureaus in Arusha.” He added: “The military should only be deployed in special emergencies, such as defence of the constitution and the country’s borders.”
Nyakundi Report notes that the central bank’s action came amid wider scrutiny of how Tanzania was policing its currency market and the use of security forces in economic operations.
