The Independent Uganda: You get the Truth we Pay the Price
By Independent Team & Agencies
Tanzania is set to remove restrictions on movement of capital across its national borders this month.
The move will allow Tanzanian to invest in stock markets in the East African region for the first time.
‘This bears the potential of dramatically increasing demand in the equities markets and boosting share prices as more takers come on board,’ said Bob Karina, an executive director at the Faida Investment Bank.
Two years ago, Tanzania used these restrictions to bar its citizens from buying shares in East Africa’s biggest share sale – Safaricom – blocking attempts by the Kenya government to roll out a region wide initial public share offering (IPO).
Safaricom “ the region’s most profitable company“ had allocated 65 per cent of the shares issued under its highly publicised IPO to local (EAC) subscribers but got no takers from Tanzania.
A few months later, the country’s capital markets regulator also blocked East Africans from participating in the IPO involving the National Micro-finance Bank of Tanzania.
Analysts said removal of the restrictions is the clearest signal yet that Tanzania is slowly stepping back from its protectionist policies in favour of a free market offering hope that the country will also let go of its nationalistic policies on land ownership and movement of labour.
Lifting restrictions on cross-border investments also means Tanzanian companies looking for capital to grow their businesses can from January next year include Uganda, Rwanda and Kenya’s capital markets in their list of options“ a move that could take the integration of the region’s economy to the next level.
