Dar es Salaam. The Tanzanian shilling has emerged as one of East Africa’s most resilient currencies, with experts and the Bank of Tanzania (BoT) attributing its stability to surging gold prices and improved export performance.
Gold prices have soared to historic highs, surpassing $4,000 per troy ounce (31.1g) late last week, as investors worldwide rush to the precious metal amid global economic and geopolitical uncertainty.
Since the start of 2025, gold prices have risen by more than 50 percent, a surge analysts link partly to United States President Donald Trump’s return to office earlier this year.
The metal’s value spiked in April following renewed trade tensions under the Trump administration and rose again in August after he publicly criticised the independence of the US Federal Reserve. Ongoing wars in Gaza and Ukraine have further driven investors toward gold as a safe haven.
This development has brought good fortune to Tanzania, Africa’s seventh-largest gold producer after Ghana, South Africa, Mali, Burkina Faso, Sudan and Guinea.
The latest BoT data show the country’s gold export earnings surpassed the $4 billion mark for the first time in history during the year ending August 2025.
Tanzania earned $4.3 billion from gold exports in that period, up from $3.2 billion the previous year, a 37.5 percent increase.
As a result, the Tanzanian shilling weakened by only around six percent against the US dollar in the year ending October 13, 2025, compared with a 10 percent depreciation of the Kenyan shilling over the same period.
The Ugandan shilling lost about four percent, mainly due to foreign investment inflows linked to the country’s oil industry. BoT Governor Emmanuel Tutuba said both the price and volume of gold exports have increased significantly.
For the first time, gold prices hit $4,063 per troy ounce, driven by investor demand during global uncertainty. “This increase in gold exports boosts the availability of dollars in Tanzania,” said Governor Tutuba.
“The Bank of Tanzania buys gold directly from miners, who either sell to the central bank or export it, helping to inject more foreign currency into the economy.” He said that import demand has declined as local industries now produce goods such as tiles, glass, and furniture, reducing reliance on foreign products.
Mr Tutuba also highlighted the impact of a new law requiring all domestic transactions to be conducted in Tanzanian shillings rather than US dollars. “This policy has strengthened the shilling because local goods and services are now paid for in the national currency, while dollars are reserved for external trade,” he explained.
Beyond gold, other exports are contributing to the stronger currency. The tourism sector, particularly in Zanzibar and Arusha, has rebounded sharply, while agricultural exports, including maize, beans, rice, and groundnuts, remain robust.
“Strong gold exports, reduced imports, prudent currency management, supportive laws, and rising non-traditional exports have all contributed to the improved value of the Tanzanian shilling,” Mr Tutuba said.
Independent economist Christopher Makombe echoed this view, saying the shilling’s strength stems from higher foreign exchange inflows, sound government regulation, and improved macroeconomic fundamentals.
“Higher earnings from gold, agriculture, and tourism have increased dollar supply,” he said. “At the same time, regulations discouraging dollar use in local transactions have encouraged people and businesses to convert their holdings into shillings, reducing pressure on the currency.”
He noted that the government’s directive requiring gold dealers to sell part of their reserves to the BoT has boosted foreign reserves and strengthened investor confidence.
On a broader level, Mr Makombe said Tanzania’s economic stability, marked by low inflation, steady GDP growth, and a narrowing current account deficit, has reinforced the shilling’s resilience.
“Demand for dollars has eased following the completion of major import projects and a drop in global oil prices, which has lowered the import bill and foreign currency outflows,” he added.
Another independent analyst, Oscar Mkude, noted that while the shilling experienced volatility against the US dollar late last year, the BoT’s interventions helped restore stability. “Earlier, it was difficult to access dollars through banks due to parallel market activity,” he explained.
“But as tourism and gold earnings increased around mid-year, the supply of foreign currency improved significantly.” He added that seasonal factors also supported the shilling’s rebound. After the harvest season, increased food supply reduced import demand, while the BoT’s monetary tightening early in 2024, raising interest rates to six percent, helped curb inflation and stabilise the currency.
“The subsequent reduction to 5.75 percent reflects a more accommodative policy stance,” he said.
Mr Mkude further noted that the BoT’s gold reserve policy, which requires exporters to remit 20 percent of their proceeds to the central bank, aims to build strategic reserves.
“Over time, the BoT plans to accumulate enough gold to use as a monetary asset. This will enhance its ability to intervene effectively in the forex market if the shilling weakens,” he said.
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