What you need to know:
- They say this practice introduces additional economic strains, exacerbated by the fluctuating exchange rates and limited availability of foreign currency
Dar es Salaam. Tenants residing in upscale areas of Dar es Salaam have voiced concerns for being obliged by landlords to pay rent in foreign currency.
They say this practice introduces additional economic strains, exacerbated by the fluctuating exchange rates and limited availability of foreign currency.
Tenants are forced to pay in dollars despite a prohibition of such a practice by the Bank of Tanzania.
The central bank recently said domestic payments for goods and services should be done only in Tanzanian shillings.
A survey in areas such as Masaki, Upanga, Mbezi Beach, Mbweni, and Bahari Beach revealed that most agents charge their clients in dollars and a few others in euros.
A tenant in the Bahari Beach area who asked for anonymity said the practice adds another layer of complexity to renting houses whose costs have been rising.
“It creates an additional burden for tenants who earn their income in shillings. It affects middle-income individuals, like me, who are striving to meet financial obligations,” she said.
According to her, some landlords have been adding clauses in the contract that say there will be a 10 percent annual increase in the rent.
This increase impacts middle-income earners the most.
“It seems that this trend is contributing to a growing divide between the affluent and those struggling to secure decent housing,” she said.
“I’m not a foreigner. Where do I get the dollars to pay while my income is in Tanzanian shillings?” said another potential tenant who was frustrated by the condition.
An agent who uses Instagram to post houses that are on rent said stand-alone houses and fully furnished three-bedroom apartments that are located in the aforementioned areas normally fetch between $1,400 and $1,500 per month.
“The landlords direct us to charge in dollars on the grounds that their houses are valuable and located in posh areas,” he said, asking for anonymity.
According to him, companies that rent houses for their employees in the posh areas are charged up to $4,000 monthly, and they pay for six months plus an extra amount worth one month as the agent fee.
Other agents accept the local currency, but the price is always pegged to the dollar.
Acting real estate director at the ministry of Lands, Housing and Human Settlements Development, Ms Upendo Matotola, told The Citizen that currently there is no law that specifies the type of currency to be used in collecting rent from tenants.
However, she acknowledged the directives of the central bank, which prohibit the use of foreign currency by residents of Tanzania for domestic payments of goods and services.
The Bank of Tanzania governor, Mr Emmanuel Tutuba, said the central bank recently observed violations of the directives.
“The central bank would like to remind the general public that the government’s directives are still valid and should be adhered to at all times. All prices of goods and services in Tanzania should be quoted in Tanzanian shillings,” he said.
The services whose payment is in foreign currency in contraventions of the directive include rent, school fees, medical services, equipment, transport and logistics and port services.
Other include electronic equipment and telecommunication services.
“We have continuously informed the public, including tenants, not to accept the use of foreign currency as payment for rent,” he stressed.
According to him, BoT has also been in talks with the Tanzania Law Society (TLS) not to accept witnessing a rent contract whose payment is pegged in foreign currency.
Prices to be paid by tourists or non-resident customers may be quoted and paid in foreign currency, he said, citing such services as accommodation, travel, airport and visa, transit trade and cargo handling.
Tanzania has been facing a shortage of dollars since last year, affecting importers and recently, the trend stirred the emergence of the dollar black market.