DSE chief: Tanzania poised to be sustainable capital hub

2025 has so far been a bag of mixed performance; what assurance are you giving investors and what does the remainder of the year look like?

We’ve seen some very strong momentum since the beginning of Q3. Our total market capitalisation surpassed Sh2.5 trillion, while domestic equities crossed Sh14 trillion, the highest levels in over five years.

So, naturally, the market hit a plateau at some point. Much of that rally was fuelled by optimism following the publication of audited results by listed companies. Investors often rush in when markets trend upwards, but corrections are a normal and healthy part of market cycles. It’s important to note: a correction doesn’t necessarily signal a market decline.

How do you manage the jitters of first-time investors when such volatility happens?

The key is education. First-time investors should never dive in blindly. We are fortunate to have a pool of certified financial educators who provide capital markets training beyond general financial literacy.

When new investors listen to experts, they learn how to ride the wave, not just chase trends. That knowledge helps them manage volatility with confidence rather than fear.

DSE introduces new trading regulations effective June 2, 2025, including amendments to trading hours and tiered price caps. What impact have these had?

Two major changes stand out: Trading hours; we now open half an hour earlier. This is part of a phased plan to gradually align with global markets and cater to multiple time zones. The second is price triggers: Previously, certain counters stalled after rapid rallies, creating panic among shareholders. By revising the rules, we’ve improved liquidity and restored investor confidence.

Both changes are already showing positive impact on market activity.

More and more investors are flocking to collective investment schemes and bonds. What is driving this trend?

Several factors: The first is awareness campaigns by issuers and brokers. Corporate bonds from major financial institutions have especially boosted visibility. Once an investor understands one security, they often diversify into others.

Success stories from collective investment schemes: For example, UTT Asset Management, Tanzania’s largest fund manager, has built a nationwide footprint and continues to grow its portfolio.

Broker education: Brokers are doing a commendable job in helping investors understand both the primary IPO market and the secondary market.

Once investors see bonds pay off, they’re encouraged to reinvest, creating a virtuous cycle of growth.

Credit to key private sector industries such as manufacturing and agriculture has declined. How does this affect trading on the DSE?

Credit flow is often a reflection of sectoral performance or shifts in lending appetite. While some industries may experience short-term credit declines, Tanzania’s broader economy remains on a growth trajectory.

From a capital markets perspective, liquidity is key. When there’s more liquidity in the economy, more money finds its way into investments, whether long-term deposits or securities trading.

With the growing focus on green and social bonds, what strategies are in place to educate investors on sustainable finance?

Tanzania has made remarkable progress here. In the past 4–5 years, about 45 percent of all corporate and sub-national bonds issued have been sustainability bonds.

Education has been driven not just by issuers but also by international investors, who are keen to back green and social finance. These efforts have positioned Tanzania as a regional reference point, so much so that other exchanges are coming to learn from our experience.

How can the growth in sustainable bonds be sustained?

The main risk lies in greenwashing, overpromising and underdelivering. To mitigate this, many of our issuances are cross-listed in Luxembourg and London, requiring issuers to meet stringent reporting obligations.

Sustainability bonds come with annual certification and verification requirements. Issuers must prove they’re living up to their commitments. This accountability ensures the credibility of ESG instruments.

How does the DSE collaborate with regional exchanges like the Nairobi Securities Exchange (NSE) to foster cross-border investments?

Our most advanced discussions with the NSE center on cross-listing ESG bonds.

Additionally, as a region, we’ve launched the East Africa EAE 20 Share Index, which tracks 20 blue-chip companies across Tanzania, Kenya, Uganda, and Rwanda. This index not only benchmarks regional performance but also helps attract global investors by marketing East Africa as an integrated investment destination.

We are also active in SADC initiatives, reinforcing Tanzania’s role beyond the East African bloc.

What external factors have tested the market this year, and how does the DSE address geopolitical events?

The biggest challenge has been capital flight by foreign investors, largely triggered by US Federal Reserve rate hikes and inflationary pressures. Funds flowed out of emerging markets back to safe havens.

Fortunately, local investors stepped in to fill the gap. We’ve seen a notable rise in retail participation, which strengthens market resilience. That said, foreign capital remains important, and we continue efforts to attract it.

Domestic investors account for over 80% of trading activity. How can foreign investor participation be revived?

A few measures: Investor roadshows abroad to market Tanzania’s opportunities. Stronger foreign capital inflow policies at the national level. Building confidence through macroeconomic stability.

We’re encouraged by the growing retail base locally, but foreign participation remains essential for liquidity and global visibility.

General elections tend to disrupt stock market activities. What is the situation as Tanzania heads to the October 2025 polls?

Markets usually react to political transitions, but so far, Tanzania remains stable. The outlook is for peaceful elections, which helps calm investor nerves.

Consistent dialogue between market participants, government, and investors further cushions against election jitters.

How is the DSE supporting SMEs and startups to access capital markets?

 We have multiple platforms: Enterprise Growth Market: Our alternative market tailored for SMEs. Endeleza Accelerator: Helps profile SMEs so they can raise capital more credibly. Training Programs: Founders and CEOs are trained to prepare their companies for listing.

These initiatives give SMEs legitimacy, access to investors, and growth pathways.

In terms of regulatory compliance, how is the DSE balancing innovation with oversight?

Our regulator, the CMSA, has embraced innovation while safeguarding integrity. For instance, they’ve introduced a regulatory sandbox, a controlled environment where new ideas can be tested before formal regulations are established. This balance encourages fintech and market innovation without compromising oversight.

What remains the biggest limitation inhibiting DSE’s growth?

Two challenges stand out: Few listings – The last government company listed was NMB in 2008. We need more state and private sector listings to deepen the market.

Limited investor knowledge. Many Tanzanians still have a shallow understanding of capital markets, which affects participation levels.

Looking ahead, what is the DSE’s vision for positioning Tanzania as a regional hub for capital markets by 2026 and beyond?

Our vision is to become the preferred destination for sustainable capital raising. We’ve proven our capacity in green and social financing, and now we aim to broaden our scope, strengthening Tanzania’s reputation as a credible, innovative, and resilient market hub for the region.