MOSCOW: TANZANIA and Russia are in the final stages of negotiations on a framework that will allow bilateral trade to be settled in local currencies, a move aimed at reducing transaction costs, improving payment efficiency and strengthening economic ties between the two countries.
The agreement will enable businesses to conduct transactions in Tanzanian shillings and Russian rubles, reducing reliance on third-country currencies for trade settlements.
Minister of State in the President’s Office (Planning and Investment), Professor Kitila Mkumbo, disclosed the development on Thursday, at a press briefing to journalists accompanying President Samia Suluhu Hassan on her state visit to Russia.
Prof Mkumbo said the two countries are expected to sign the necessary agreements before the conclusion of President Samia’s visit, paving the way for the use of the Tanzanian shilling and the Russian ruble in commercial transactions.
“We are in the final stages of these discussions and expect to conclude them before the end of the visit. The arrangement will simplify trade transactions and create greater opportunities for economic cooperation between our countries,” he said.
According to Prof Mkumbo, the current trade volume between Tanzania and Russia stands at approximately 307 million US dollars (about 802bn/- ), and the proposed framework is expected to unlock new opportunities in trade, investment and economic development.
He explained that the initiative forms part of broader efforts by both countries to reduce barriers to trade, improve transaction efficiency and create a more conducive environment for businesses.
Prof Mkumbo noted that Russia remains an important partner in Tanzania’s development journey, building on longstanding historical ties dating back to the period of Africa’s liberation struggles.
“Russia has made significant advances in sectors such as agriculture, agro-processing, improved seed production and mining. These are areas that can make a meaningful contribution to Tanzania’s economic transformation agenda,” he said.
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He added that enhanced cooperation with Russia would support the implementation of Tanzania’s Development Vision 2050, which is expected to take effect in July this year.
On infrastructure development, Prof Mkumbo said one of the key outcomes anticipated from the visit is progress towards the implementation of the Southern Railway Project through a Public-Private Partnership (PPP) arrangement.
He further revealed that Tanzania and Russia are also finalising agreements that will enable Air Tanzania Company Limited (ATCL) to launch direct flights between Dar es Salaam and Moscow.
The planned route is expected to improve connectivity, facilitate business travel, boost tourism and strengthen economic ties between the two countries.
“The introduction of direct flights will enhance people-to-people exchanges while creating new opportunities for trade, tourism and investment,” Prof Mkumbo said.
The developments underscore growing economic relations between Tanzania and Russia as both countries seek to expand cooperation across key sectors, including trade, infrastructure, transportation, agriculture and investment.