Tanzania has marked a major milestone in international finance following the listing of its first offshore Tanzanian shilling-denominated bond on the London Stock Exchange.
The $100 million bond, equivalent to about TSh262.5 billion, was issued by the International Finance Corporation (IFC), a member of the World Bank Group. The proceeds have been provided to NMB Bank Plc as a loan to expand financing for micro, small and medium-sized enterprises (MSMEs) in Tanzania.
After launching the bond at the London Stock Exchange, Tanzanian Finance Minister Ambassador Khamis Mussa Omar described the listing as the beginning of a new chapter in Tanzania’s engagement with international capital markets.
“This is the start of an important stage in Tanzania’s journey towards participating fully in global capital markets using our own currency,” Omar said.
He noted that bonds have traditionally been associated with government financing for development projects. However, the IFC bond, arranged in partnership with NMB Bank, will direct capital mainly towards private-sector development.
According to the minister, listing the bond on a prominent market such as the London Stock Exchange demonstrates international financial institutions’ confidence in Tanzania’s economy and financial-sector reforms.
He said the listing would strengthen Tanzania’s reputation among global investors and could improve the country’s ability to access financing at more affordable rates.
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“Our goal is not only to ensure that this security succeeds in the international market, but also to make certain that its benefits are reflected directly in private-sector growth, particularly among small and medium-sized businesses that form an important pillar of our economy,” Omar said.
NMB Bank Chief Executive Officer Ruth Zaipuna said the bank would use the financing to provide loans to small businesses, farmers, women-owned enterprises and other businesses contributing to Tanzania’s economic development.
At least 20 per cent of the funds, approximately TSh52.5 billion, has been set aside to support women-owned small businesses.
NMB is one of East and Central Africa’s most valuable banks. According to a recent Africa Business ranking, it has a market value of about $2.694 billion, behind Tanzania’s CRDB Bank, valued at approximately $2.718 billion.
During his visit to London, Omar also held talks with investors from Britain and other countries as part of the government’s efforts to attract international capital for Tanzania’s Development Vision 2050.
He said the private sector was expected to provide 70 per cent of the capital required to implement the vision, while the government and public institutions would contribute the remaining 30 per cent.
The minister invited investors to participate in projects including the Standard Gauge Railway, electricity generation, port expansion, airports, mineral development and value addition in agriculture.
