DAR ES SALAAM: The Bank of Tanzania’s latest auction of 25-year Treasury Bonds has made history, with investor bids soaring to nearly five times the amount on offer — a landmark moment for the nation’s securities market.
The government had targeted 264.31bn/- through the long-term bond issuance, yet demand surged to 1.23tri/-. Despite the overwhelming response, the Central Bank maintained discipline, accepting exactly 264.31bn/- in successful bids — matching the offer and resisting the temptation to absorb excess liquidity, even at favourable pricing.
Market analysts say the extraordinary oversubscription underscores investor confidence in Tanzania’s economic stability, debt management capability, and government policies.
“As expected in this rate-downcycle, investor sentiment has aligned with the Central Bank’s easing stance — but the demand far exceeded even my most optimistic expectations,” said Mr. Geofrey Kamugisha, Head of Business Development and Customer Service at Alpha Capital. He noted that the auction’s success came despite a coupon cut from 15.75% to 15.00%, reflecting strong trust in the government’s fiscal direction.
The weighted average yield to maturity stood at 14.4239%, down 37.39 basis points from the last 25-year auction on June 4 (14.7978%). Of 939 bids submitted, only 79 succeeded — highlighting intense competition and a scarcity premium for long-duration securities.
Tanzania Securities Limited’s Dar es Salaam Stock Exchange Weekly Report confirmed the auction exceeded expectations, noting that such high demand compressed yields but reduced turnover in the secondary market.
Zan Securities’ Advisory and Research Manager, Mr. Isaac Lubeja, described the sale as the first 25-year Treasury Bond issuance of the 2025/26 fiscal year, following the release of the updated auction calendar.
“Investor participation remained robust, with the auction posting a high subscription rate of 464.85% — a record for this instrument,” Mr. Lubeja said, adding that this performance positions Tanzania ahead of its East African peers in attracting long-term capital.
Analysts agree the success strengthens Tanzania’s reputation as a regional investment hub for stable, long-duration debt instruments, setting a benchmark for future sovereign issuances. The record-breaking response, they say, confirms the market’s capacity to absorb large-scale, long-term debt while signalling confidence in the nation’s fiscal and economic trajectory.
Source: Daily News
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