Guidance for Tourists on Acquiring Local Currency and Exchange Services.
Travelers coming to Africa and particularly Uganda are advised to convert their currency before starting their journey or identify cost-effective options for currency exchange while abroad. Currency conversion at hotels, currency kiosks in airports, or elsewhere in the destination country may incur high fees and unfavourable exchange rates. Optimal alternatives are typically associated with local banks or credit unions, underscoring the importance of proactive planning regarding currency exchange.
Research the Local Currency: Before your trip, research and identify the local currency used in the countries you’ll be visiting. This information will help you understand what currency you need to obtain. In Uganda we are using shillings, Rwanda franc(Mafaranga), and etc.
Notify Your Bank: Inform your bank of your travel plans, including the countries you’ll be visiting and the duration of your stay. This step is crucial to prevent your bank from flagging your transactions as suspicious due to international activity.
Check Currency Restrictions: Some African countries have restrictions on the amount of foreign currency that can be brought into the country. Ensure you are aware of any restrictions or regulations regarding currency exchange.
Exchange Currency Before Departure: Consider exchanging a small amount of money into the local currency before your departure. This will provide you with some cash for immediate expenses upon arrival, such as transportation from the airport to your accommodation, if you don’t have special arrangement with your tour operator or hotel.
Use ATMs (Automated Teller machine): Upon arrival in Africa, one of the most convenient ways to obtain local currency is by using ATMs. Look for ATMs located in airports, major cities, and tourist areas. Make sure the ATM accepts your card network (e.g., Visa, MasterCard, American express, Union pay and others) and follow the on-screen instructions to withdraw cash in the local currency.
Check Exchange Rates: Before using an ATM, check the current exchange rate to ensure you are getting a fair rate. Keep in mind that some ATMs may charge additional fees for international transactions and currency conversion.
Visit Banks and Exchange Offices: If you prefer to exchange currency in person, you can visit banks, currency exchange offices, or authorized dealers. Banks often offer competitive exchange rates, but the process may take longer compared to exchange offices.
Compare Rates: Before exchanging currency, compare rates from multiple sources to ensure you get the best deal. Be wary of hidden fees or commissions that may impact the overall value of your exchange.
Avoid Exchanging Currency at Hotels: While some hotels may offer currency exchange services, the rates are often less favourable compared to banks and exchange offices. If you must exchange currency at a hotel, inquire about the exchange rate and any associated fees beforehand.
Carry a Mix of Payment Methods: It’s advisable to carry a mix of payment methods, including cash and cards, to cater to different situations. While credit cards are widely accepted in urban areas, having cash on hand is essential for transactions at smaller establishments or in rural areas where card acceptance may be limited.
Hotels and Resorts: Some hotels and resorts offer currency exchange services for their guests. However, rates may not be as favourable compared to other options, so it’s wise to compare rates before exchanging money.
Credit Cards: Major credit cards like Visa, MasterCard, and American Express are widely accepted in urban areas and tourist destinations across Africa. However, smaller establishments may only accept cash, so it’s advisable to carry some local currency for smaller purchases.
Traveller’s Checks: While less common nowadays, traveller’s checks can still be used in some places in Africa. However, they may not be as widely accepted or convenient as other methods.
Prepaid Travel Cards: Prepaid travel cards loaded with local currency can be a convenient and secure option for managing expenses while traveling. They work similarly to debit cards and can be used at ATMs and merchants that accept card payments.
Key Points to Remember:
A) High Currency Exchange Fees: Due to high fees associated with currency exchange, travellers should contemplate converting currency before departure.
B) Convenient and Economical Options: Banks, credit unions, online bureaus, and currency converters offer convenient and often more affordable currency exchange services.
C) Best Means for Currency Conversion Abroad: Upon arrival in the foreign country, utilizing foreign ATMs or identifying nearby ATMs or banking affiliates associated with your bank are typically the most favourable options for currency conversion.
D) Usage of Credit and Debit Cards: Many credit and debit card issuers allow overseas purchases without foreign transaction fees, making them advantageous alternatives to cash.
E) Understanding Exchange Fees: Currency exchange fees cover operational costs and contribute to financial institutions’ revenue. They are charges applied for converting one currency to another, reflecting the risks and operational expenses involved.
Other Travel Tips:
Notify your bank and credit card companies of your travel plans to avoid disruptions in accessing your accounts. Paying in U.S. dollars abroad is discouraged, as it may result in unfavourable exchange rates and fees.
Worst Places to Exchange Currency:
Avoid exchanging currency at airport kiosks, hotels, and tourist areas due to high fees and poor exchange rates.
When to Exchange Currency:
Optimize currency exchange before the trip to secure favourable rates. Avoid last-minute exchanges, especially during weekends or holidays when liquidity is lower.
Alternatives to Exchanging Currency:
Credit cards, traveller’s checks, or spending U.S. dollars may serve as alternatives. However, they may not always offer the best exchange rates.
Handling Leftover Foreign Currency:
Upon returning home, visit your bank or credit union to convert leftover foreign currency. If banks do not accept certain currencies, consider converting them at airport kiosks or stores before departure.
