Making Dira 2050 investable through capital markets

TANZANIA: TANZANIA’S ambition to become a one trillion US dollars economy by 2050 will depend not only on sound development policies, but also on its ability to mobilise long-term capital, finance productive enterprises and enable citizens to participate in wealth creation and ownership.

Dira 2050 presents a historic opportunity to transform the economy, raise living standards and create sustainable prosperity. Achieving these aspirations will require substantial investment in infrastructure, agriculture, manufacturing, energy, housing, technology and human development.

Government revenue, bank lending, foreign direct investment and development finance will remain important.

However, these sources alone may not meet the scale and diversity of long-term financing required. Tanzania must therefore position its capital markets as a central instrument for translating Dira 2050 into productive investment.

The Capital Markets and Securities Authority (CMSA) reported that investments in the industry reached 72.24tri/- as of March 31, 2026, an increase of 44.5 per cent from the corresponding period in 2025.

The regulator attributed the growth partly to product innovation and increased domestic investor participation.

This provides a foundation for further expansion. However, investment value and stock market capitalisation should not be confused with new money raised for productive activity. Rising share prices can increase market capitalisation without injecting fresh capital into companies.

For Dira 2050, the priority should be strengthening primary markets, where issuers raise new funds, while improving secondary-market liquidity to give investors confidence.

Tanzania needs sustained investment in transport corridors, electricity, water systems, affordable housing, logistics and digital infrastructure.

Capital markets can complement public budgets and bank lending through infrastructure bonds, corporate bonds and other securities. Projects with predictable cash flows, including power facilities and incomegenerating property, may be financed through instruments structured around their revenue streams.

Public-private partnerships can also combine public development priorities with private capital and expertise. However, projects must undergo rigorous feasibility assessments, transparent procurement and appropriate risk allocation.

Securities should finance viable investments rather than transfer poorly assessed commercial risks to investors.

Tanzania’s 2025 regulations on corporate and subnational sustainability bonds offer a framework for expanding sustainable finance. Effective implementation could support climate-resilient infrastructure and other qualifying development projects.

Industrial transformation will also depend on domestic enterprises, many of which struggle to secure long-term financing because of limited collateral and the repayment demands of conventional bank loans.

Equity financing allows businesses to raise capital without fixed debt repayments, while corporate bonds offer another option for creditworthy companies.

The government, CMSA and Dar es Salaam Stock Exchange (DSE) should strengthen pathways for businesses to progress towards capital-market financing.

This includes improving access to suitable listing segments, simplifying procedures without weakening investor protection and helping companies meet financial reporting, governance and disclosure requirements.

Small and medium-sized enterprises will also need venture capital, private equity and professionally managed investment funds before they are ready for public listing.

Strengthening the DSE Enterprise Acceleration Programme (DEAP), alongside investor-readiness support, independent audits and credible financial records, could help build a pipeline of investable businesses capable of expanding production and creating jobs.

Mobilising domestic savings is equally important. Pension funds, insurers, investment funds, cooperatives and individual savers can contribute to a deeper capital market. Institutional investors are particularly valuable because their long-term investment horizons can align with infrastructure and productive enterprises, subject to fiduciary responsibilities and prudential requirements.

For households, collective investment schemes offer access to professionally managed portfolios, including for people with modest savings. Expanding financial awareness, digital access and suitable investment products could encourage a broader culture of long-term investment.

This must be supported by transparent fees, reliable custody arrangements and strong action against fraud to ensure that participation is safe and meaningful.

Government securities also play an important role by financing public expenditure and establishing benchmark yields against which other securities can be priced.

A reliable sovereign yield curve helps companies and investors assess borrowing costs, compare returns and price corporate debt.

However, government borrowing should complement rather than overshadow privatesector financing. Better credit assessment, credit-rating capacity and corporate disclosure would help investors evaluate different issuers and risks.

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Tanzania should also expand innovative products, including Shariah-compliant finance, Sukuk, collective investment schemes and sustainability bonds.

Such instruments can attract investors whose preferences are not fully served by conventional products and connect suitable projects with capital seeking environmental or social outcomes.

Innovation, however, must be supported by credible project selection, transparent reporting and strong financial oversight. Regional integration offers another opportunity.

Opening the sovereign debt market to international investors can broaden participation, attract foreign capital and potentially improve liquidity and price discovery.

Stronger links with East African and Southern African capital markets could diversify funding sources and expand Tanzanian enterprises’ access to investment beyond domestic savings.

Market development also requires efficient technology, reliable information and investor confidence. Digital account opening, trading infrastructure and wider access to market information can reduce participation costs, particularly outside major urban centres.

The DSE recorded 126,704 new central depository system accounts in 2025, an encouraging sign of expanding access.

However, account registrations alone do not show how many investors are active or how much capital they contribute.

The next step is to translate access into sustained participation, deeper liquidity and increased financing for issuers.

Consistent enforcement of market rules, fair treatment of investors and credible corporate reporting will remain essential.