Bank of Tanzania Opens Securities Market to Non-Residents

The Bank of Tanzania is altering foreign-exchange laws to allow non-residents to participate in government-securities auctions. Previously, investment in the domestic market was restricted to Tanzanians living abroad and nationals of the East African Community and the Southern African Development Community.

To support this liberalization, the central bank will publish a daily sovereign yield curve to provide a benchmark for pricing corporate bonds and loans. This initiative follows the adoption of a benchmark interest rate-based monetary policy framework in early 2024. Governor Emmanuel Tutuba stated that the yield curve is expected to bring more foreign investors into the market.

Tanzania aims to borrow 3.27 trillion shillings ($1.24 billion) from domestic sources this fiscal year, representing an 11% increase over the previous year. In tandem with these domestic efforts, Finance Minister Khamis Mussa Omar indicated the government may sell a Eurobond this year depending on market conditions, with some advisers suggesting a potential raise of $500 million.