LATRA Tanzania: Digital Payment Adoption Stalls as Cash Dominates Public Transport

• Cash payments accounted for 95.3% of passenger fares and 1.99 trillion Tanzanian shillings in public transport over the past four years.
• Electronic transactions represented only 4.7% of passengers and 6.8% of total revenue, amounting to 144.28 billion Tanzanian shillings.
• The Land Transport Regulatory Authority (LATRA) Director General, Habibu Suluo, highlighted this significant gap despite the Electronic Transactions Act (Cap. 442) mandating digital payment options for various services.
• LATRA also reported substantial growth in the regulated transport sector, with commercial vehicle licenses increasing by 146.1% and Vehicle Tracking System connections rising from 5,979 to 14,743.
• The authority issued comprehensive road safety guidelines for transport stakeholders in preparation for anticipated El Niño rains, covering vehicle maintenance and driving precautions.

Despite regulatory requirements aimed at promoting electronic transactions, cash payments continue to overwhelmingly dominate Tanzania's public transport sector, highlighting a significant gap in digital payment adoption.

Despite regulatory efforts to encourage modernization, cash transactions overwhelmingly dominate Tanzania's public transport sector, accounting for a staggering 95.3 percent of passenger fares over the past four years. Official data released by the Land Transport Regulatory Authority (LATRA) reveals that out of 62.18 million passengers recorded through online ticketing systems during this period, 59.27 million opted to pay in cash. This highlights a significant challenge in LATRA Tanzania digital payment adoption.

In monetary terms, the reliance on cash is equally pronounced. Of the 2.13 trillion Tanzanian shillings (Tsh) collected, cash payments constituted 1.99 trillion Tsh. Conversely, electronic payments amounted to only 144.28 billion Tsh, representing a mere 6.8 percent of the total revenue. These figures, provided by LATRA Director General Habibu Suluo, underscore the substantial gap between policy objectives and the current reality on the ground regarding digital payment policy Tanzania.

The low rate of digital payment adoption persists despite existing legal requirements for electronic transactions in various public transport services. These mandates are enshrined in the Electronic Transactions Act (Cap. 442) and apply to critical segments of the transport network, including bus rapid transit services, long-distance buses, ferries, and ride-hailing platforms. The disparity between these legal provisions and actual usage indicates potential hurdles for transport sector compliance Tanzania.

LATRA Director General Habibu Suluo acknowledged the difficulties associated with increasing digital uptake. However, he noted a growing recognition among both transport operators and government entities regarding the enhanced transparency that electronic payment systems can offer. This suggests an ongoing effort to bridge the gap, even as Tanzania public transport cash payments remain the preferred method for the vast majority of commuters.

Beyond the push for digital payments, the Land Transport Regulatory Authority (LATRA) has reported substantial growth across the regulated transport sector during the tenure of the sixth phase government. The number of commercial vehicle licenses issued saw a significant increase of 146.1 percent, rising from 239,953 in the 2021/22 fiscal year to 590,468 by 2025/26. Concurrently, the number of buses integrated into LATRA's Vehicle Tracking System (VTS) also expanded considerably, growing from 5,979 to 14,743 within the same timeframe.

In a separate but equally crucial directive, Mr. Suluo urged transport stakeholders to prioritize road safety in anticipation of the upcoming El Niño rains. He emphasized the importance of thorough vehicle maintenance, specifically highlighting braking systems, tyres, lights, windscreens, and windscreen wipers. Drivers were advised to exercise extreme caution, avoiding flooded areas, reducing speed, and increasing following distances during periods of poor visibility caused by rain, fog, or other adverse conditions. Passengers were also encouraged to consult weather forecasts and road condition updates before embarking on journeys, and to consider postponing non-essential travel during heavy rainfall, which could lead to flooding, slippery surfaces, landslides, and road damage.

Lawyers and compliance officers advising transport operators in Tanzania should note the significant gap between the Electronic Transactions Act's requirements for electronic transactions and the low actual adoption rates. This indicates potential non-compliance risks for businesses and suggests a need to monitor for increased enforcement or policy adjustments from LATRA regarding digital payment mandates.

Source: Original reporting via Daily News