At least
ten foreign exchange bureaus have not opened for business in Dar es
Salaam alone for about three weeks now, but insiders say the number
could rise to at least 100 countrywide as the deadline for
implementation of the licensing requirements approaches.
Forex
shops that have not opened for business at the city’s central business
district include Ruby, Maddy, Europa, Money Link, Nana and Tungwe.
Several more are reported to have not opened for some time in Kariakoo
and other locations. However, The Citizen could not independently
confirm whether the closure was permanent or temporary and whether it
was a result of the new requirements.
Bank of
Tanzania (BoT) director of bank supervision Kennedy Nyoni told The
Citizen yesterday that at least seven bureaux de change had already
notified the regulator (BoT) of their intention to close business. He
declined to name them.
A bureau de
change operator who preferred anonymity told The Citizen yesterday that
the new licensing conditions were too stringent for most operators to
meet, and estimated that up to 100 may close business as the December 31
deadline approaches.
“In fact,
some of us are only here because we still have contracts with landlords
for the premises from which we run our businesses. As soon as our lease
agreement expires, we will also be closing,” he said.
He added
that the requirement that one should have at least Sh300 million
unrealistic since one could easily earn at least Sh8 million in three
months by depositing the same amount in a fixed account at a commercial
bank.
“Why would
one need to go through a cumbersome process of sourcing Sh300 million
and then pay rent and tax and employ people at this time when the
business environment is not good? Why not put that money in a fixed
deposit account at a commercial bank and enjoy the interest without
sweating for it?” he asked. But in a swift rejoinder, BoT governor Benno
Ndulu told The Citizen yesterday that the requirements were here to
stay. “All operators have been notified of the changes made on capital
requirement and are expected to be in full compliance before the
deadline,” Prof Ndulu said.
BoT revised
the rules for operating retail foreign exchange bureaux in the country
in June as part of a wider crackdown on down on money laundering.
The bureaux have been blamed for capital flight and money laundering by some senior government officials.
BoT raised
minimum capital requirements for bureaux de change, suspended licensing
of new bureaux de change and directed existing foreign currency
retailers to apply for new licences.
“The
minimum capital thresholds have been revised from Sh100 million to Sh300
million for class A (bureaux de change) and from Sh250 million to Sh1
billion for class B,” the central bank said in a circular dated June 21.
On August 28, BoT extended the deadline for operators to meet the requirements from September to December.
The
circular to that effect, which The Citizen has seen, reads in part:
“This is to inform all operating bureaux de change that the BoT has
exceptionally extended the period for bureaux de change to apply for
re-licensing up to 31st December 2017.”
The
circular also reminded operators to ensure that they strictly comply
with the new minimum wage requirements. According to BoT, at least
two-thirds of the required minimum capital should be in the form of cash
as working capital.
BoT has
also directed bureaux proprietors to authenticate the source of funds
invested in their businesses and doubled the non-interest bearing
deposit to $100,000. The deposit is held at BoT as security for money
transfer transactions.
The central
bank also directed forex bureaus to tighten security at their premises
and ensure that no person becomes a shareholder, director or member of
management or staff in more than one bureau.
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