Bagamoyo. Tanzania plans to allow investors from all over the world to participate in government securities without any restrictions starting next year, the Bank of Tanzania has said.
Currently, investors from outside Tanzania allowed to purchase both Treasury bills and bonds are only those from other East African Community member states who are also limited at 40 per cent.
However, Bank of Tanzania associate director, domestic markets department Paul Maganga said that the government is considering allowing investors from across the globe to participate in the sale of the government securities. This, according to Mr Maganga will among the things increase competition hence force investors to quote competitive bid prices which in turn will enable the government to borrow cheaply.
“We are currently observing the outcome of allowing EA members to participate in government securities. If the outcomes are good we will completely open to the rest of the world next year,” said Mr Maganga.
“We believe that we will receive the first EA investor by next week. There are all signs that they will start to participate next week,” said Mr Maganga.
He encouraged Tanzanians to participate in government securities as it is the safest investments which can enable them reap profits.
Currently only two per cent of Tanzanians participate in government total bids, he said.
Tanzania allows EA investors to purchase up to 40 per cent of offered government securities and individual country is not allowed to purchase more than 2/3 of the 40 per cent.
“We have done this purposely because we want to protect Tanzanians. This is because the capital market is not well known to many Tanzanians as compared to counterparts in Kenya or Uganda,” said Mr Maganga.
“I encourage Tanzanians to take time to familiarize with the market so as they can effectively participate.”
The Citizen
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