Tanzania pushes for sustainable capital markets
DAR ES SALAAM: FINANCE Minister, Dr Mwigulu Nchemba has argued that promoting sustainable capital markets in the Southern Africa Development Community (SADC) region is essential for fostering responsible investment and increasing access to finance for projects and businesses that align with sustainability goals.
Dr Mwigulu therefore stated that the Committee of SADC Stock Exchanges (CoSSE) is expected to play a pivotal role in advancing sustainability by facilitating dialogue, knowledge sharing and collaboration among stock exchanges, regulators, issuers, investors and other stakeholders to integrate environmental, social and governance (ESG) principles into capital market practices and promote sustainable finance initiatives.
The minister was speaking yesterday in Dar es Salaam at the launch of a workshop on development of sustainable capital markets in the SADC region.
The workshop was organised by Financial Sector Deepening Africa (FSDA); the Committee of SADC Stock Exchanges (COSSE) and Capital Markets and Securities Authority Tanzania (CMSA).
Dr Mwigulu explained that the government of Tanzania through the CMSA has been implementing initiatives for the development of innovative sustainable capital market products.
This resulted in a 31.2 per cent increase in the total value of investment in the capital markets to reach 37.3tri/- by 31st January this year from 28.4tri/- recorded on 31st January 2021.
It also led to a 61.6 per cent increase in trading turnover on the Stock Exchange to reach 9.3tri/- during the three years ended 31st January 2024 from 5.8tri/- in the corresponding period.
Some of the notable strides in the Tanzanian capital markets that have contributed to the development of innovative instruments for sustainable finance include the issuance of the first Green Bond with the big ticket size in Sub-Saharan Africa dubbed “Kijani Bond” raising 171.83bn/- to finance environment-friendly projects and businesses. This Bond attained a success rate of 430 per cent.
He attributed the achievements to a conducive policy, regulatory and operational environment accorded by President Dr Samia Suluhu Hassan.
In his presentation, CMSA’s Chief Executive Officer, Nicodemus Mkama said the CMSA in collaboration with stakeholders is developing guidelines for issuance of corporate and subnational ESG bonds.
Mr Mkama noted that regulators play a part in the development of sustainable capital markets and the ultimate achievement of Nationally Determined Contributions (NDCs) through enforcement of reporting and disclosure requirements.
