MARKET DATA REVIEW : Long-term capital for national development on focus

Since the enactment of the Capital Markets and Securities (CMS) Act, Cap. 79 of 1994 and the establishment of the Capital Markets and Securities Authority (CMSA) in 1996, there has been several developments in the Capital markets in Tanzania.

There are only 15 domestic companies listed in our local stock exchange; this number stands unfavourably when compared to over 30 companies listed in Ghana, over 60 companies in Kenya, over 250 companies in Nigeria, over 360 companies in Egypt and over 450 in South Africa.

There are two major encouraging statements that came to our attention recently, these statements came from the government: (i) the possibility of repossession of previously privatised state owned entities that were sold to some investors; and (ii) state owned entities, agencies and parastatals are now required to refocus on becoming more efficient and raise their financial needs from the local financial market.

>Privatisation is the process of transferring ownership of a business, enterprise, agency, public service, or public property from the public sector (a government) to the private sector.

>Back in 2010 two pieces of legislation (Mining Act of 2010 and the Electronic and Postal Communication Act of 2010) were passed by our Parliament and got signed by the president with all the optimism that these laws entailed to fulfill, including some of the dream of local citizens, especially the aspect of the requirement that companies with Special Mining Licences and those operating in the telecommunication sector will be required to offer shares to the public and subsequently list on...

>Why does a company issue shares? Why would the founders of businesses be willing to share the business profits and business secrets with other people when they could keep these profits and secrets to themselves?

>Over the past few months, we have informed and developed arguments as to why and how private enterprises and the public sector can access funding from the public through an organised local capital markets for their growth, development and welfare.

Auditing firm Ernst and Young (EY) has advised Tanzania to partner with the private sector and look for long-term capital to finance its infrastructure development.

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