Incredible growth of Kenya’s beer market

Tanzania to Ease Capital Control

The President of Tanzania has announced that the country aims to ease control over their capital account by 2015. This is following in the footsteps of other East African Communities (EAC), Uganda, Kenya and Rwanda, who have already liberalised their capital markets in order to facilitate economic development.

This ease in control will allow foreign investors to buy capital, not only in governmental accounts, but also in big business. Currently, only Tanzanians are allowed to invest in Treasury bills and bonds, as well as trade shares on the Dar es Salaam Stock Exchange (DSE). By opening up their market, Tanzania should start to see an influx of capital resources in the country.

Removing the limitations of capital movement is a priority that would witness increased inflows of investments as well as an ample opportunity for investors to invest in the region,” claims Capital Markets and Securities Authority’s Manager for Market Development, Nicodemus Mkama.

Tanzania expecting high growth rate

Having waited to see how this tack has worked for other emerging markets, Tanzania is in the more knowledgeable position of being able to learn from the evidence from other countries. The results from other countries who have opened up their markets have largely been positive, and these markets have seen significant growth rates.

The downside to liberalising the capital account is that Tanzania will be more susceptible to market fluctuations, but the potential growth from foreign investors should outweigh the risk. Globalisation is also something that cannot be ignored, and should rather be embraced by countries, in order to reap the rewards.

Tanzania’s plan

Mkama claims that Tanzania’s market should be open to foreign investment next year, allowing these investors to be able to buy up to 60% of the shares in companies listed on the DSE. In addition to this, he also explains that non-Tanzanian investors will also be able to buy government debt securities as early as the end of this year.

Not only do current restrictions mean that foreigners can’t buy into companies listed on the DSE, but it also means that companies operating in Tanzania that are presently over 60% owned by foreigners cannot even be listed on the exchange. This will be changing with the liberalization, thus welcoming big companies into the stock exchange who will further enrich the economy.

Keeping up their end of the agreement

Tanzania is pushing to open up their market by 2015 due to an agreement between them and the other members of the EAC to liberalise their capital accounts and markets by 2015. This agreement was reached in an effort to increase economic growth in the communities, and Tanzania is confident that they will reach the deadline.

Our people at the central bank have given me the assurance that we will meet that deadline,” said President Jakaya Kikwete in the commercial capital, Dar es Salaam. “There is some liberalization ongoing, but by 2015 we are going to be fully liberalized.”

The EAC agreement allows trading to be more open between the member states, as well as attracting interest from overseas investors. This regional integration makes it easier to do business in, and with, East African countries.

Tanzania has already taken steps to liberalise their market, following in the footsteps of Uganda and Kenya, and are well on their way to opening up their market by 2015. This will be an interesting transition for Tanzania, who before now have been very closed off in their dealings and ownership. Through this development, Tanzania also hopes to obtain a minimum credit rating of BB, putting them in the same bracket as countries such as Hungary and Guatemala.

Interested in further information on investment in Tanzania, please visit the country page on the KPMG Africa site to download economic snapshots and country profile relating to Tanzania. Better still, feel free to send us an email on and one of our professionals will get in touch

For further reading, go to these sites:

  1. Tanzania to Liberalize its Capital Account”, Corporate Digest, 13 May 2014. Available at:
  2. M. Ayhan Kose and Eswar Prasad, “Capital Accounts: Liberalize or Not?”, International Monetary Fund. Available at:
  3. Tanzania’s President Says Capital Controls to Be Eased by 2015”, GARP, 15 April 2014. Available at:
David Okwara
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