Dar es Salaam. Tanzanians planning to import vehicles, spare parts, wheat, edible oils and other commodities stand to benefit from the steady appreciation of the Tanzanian shilling. This appreciation has reduced the cost of imports and stabilised domestic prices.
The local currency has made significant gains against the US dollar in recent months. In April 2025, the exchange rate averaged Sh2,668.90 to the dollar, but by Monday, August 25, 2025, it had strengthened to an indicative rate of Sh2,454.74/2,479.29.
This appreciation has led to tangible savings for both consumers and businesses. One immediate benefit has been observed in fuel prices. Earlier this month, the Energy and Water Utilities Regulatory Authority (Ewura) announced a drop of Sh34 in petrol prices and Sh10 in diesel prices, largely due to the stronger shilling.
“The Tanzanian shilling has appreciated by an average of Sh52 compared to July. This has contributed to lower fuel prices, with petrol down $18 per metric ton and diesel down $3 per metric ton,” said Mr Raphael Mgaya, executive director of the Tanzania Association of Oil Marketing Companies (Taomac).
He added that no major shocks are anticipated in the near future and that fuel costs are likely to remain stable or may even decline slightly.
The Bank of Tanzania (BoT) has attributed the currency’s resilience to robust export performance, particularly in traditional crops such as cashew nuts, strong gold exports, and the ongoing recovery of the tourism sector.
BoT’s Director of Policy and Research, Dr Suleiman Misango, mentioned that favourable global oil prices and the central bank’s efforts to strengthen foreign exchange reserves have also played a role. At the end of June 2025, foreign reserves reached $5.972 billion, up from $5.346 billion during the same period in 2024.
These reserves surpass both the national and East African Community (EAC) adequacy benchmarks, providing enough coverage for 4.8 months of projected imports of goods and services.
The impact of the stronger shilling is visible in the import market. Motor vehicle imports for household use totalled $436.4 million in the year ending June 2025, compared to $322.6 million the previous year.
Wheat imports decreased to $345 million from $393 million, while edible oil imports rose to $160 million. Fertiliser imports also increased, reaching $374.4 million, up from $328.6 million.
Economists note that the improved exchange rate provides a cushion for Tanzanian households and businesses during a time when global economic volatility has strained many developing economies.
They argue that reduced import costs can allow businesses to expand, individuals to invest in vehicles or equipment, and small-scale entrepreneurs to explore new opportunities, such as bakeries or wholesale distribution of essential commodities.
However, some sectors have yet to feel the direct impact. Ms Fransica Lyimo, chairperson of the Tanzania Bakers Association (TBA), stated that bakers have not yet experienced relief, as many millers purchased raw materials when the dollar was still high.
“A large number of millers bought wheat flour at expensive rates, so the gains are not being felt immediately. But if the shilling maintains this strength for at least two months, we expect the changes will flow through to our industry,” she said.
She went on to explain that the cost of other inputs remains a challenge: “The baking industry is also affected by the prices of edible oil, sugar, and electricity. If all three stabilise, products like bread will definitely become cheaper. For now, it is mainly wholesalers who are benefiting, making at least Sh50 profit per loaf, while smaller bakers struggle.”
Ms Lyimo also noted that, unlike in neighbouring Kenya, bread is not a staple in Tanzania. “For example, during cassava season, bread consumption falls sharply, leaving bakers with unsold stock.”
Dr Lutengano Mwinuka, a senior economics lecturer at the University of Dodoma, stated that a stronger shilling directly enhances the purchasing power of Tanzanians, particularly for heavily imported goods. “There are significant opportunities in products such as fertilisers and cooking oil, as well as bulk-imported goods like diesel and petrol.
A strong currency translates into financial savings and lower costs for end users. This is an ideal time to explore bulk procurement systems for such products,” he explained.
Analysts, however, caution that while the appreciation has been beneficial, it requires careful management to ensure that the competitiveness of exports is not undermined. For now, though, the strengthening shilling appears to be a net gain for consumers, businesses, and the broader economy.
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