In a significant address yesterday, Tanzania's Finance Minister, Dr Mwigulu Nchemba, underscored the pivotal role of promoting sustainable capital markets in the Southern Africa Development Community (SADC) region. Dr Nchemba emphasized the necessity of fostering responsible investment and expanding access to finance for projects aligned with sustainability goals.
Speaking at the launch of a workshop on the development of sustainable capital markets in the SADC region, organized by Financial Sector Deepening Africa (FSDA), the Committee of SADC Stock Exchanges (CoSSE), and Capital Markets and Securities Authority Tanzania (CMSA), Dr Mwigulu stated that CoSSE is expected to play a crucial role. He highlighted its responsibility in facilitating dialogue, knowledge sharing, and collaboration among stock exchanges, regulators, issuers, investors, and other stakeholders. The aim is to integrate environmental, social, and governance (ESG) principles into capital market practices and promote sustainable finance initiatives.
The Finance Minister disclosed that the Tanzanian government, through CMSA, has been actively implementing initiatives for the development of innovative sustainable capital market products. Notably, these efforts have resulted in a remarkable 31.2% increase in the total value of investments in the capital markets, reaching 37.3 trillion Tanzanian Shillings by January 31, 2024, up from 28.4 trillion Tanzanian Shillings recorded on January 31, 2021.
Furthermore, there has been a substantial 61.6% increase in trading turnover on the Stock Exchange during the three years ending January 31, 2024, climbing from 5.8 trillion Tanzanian Shillings to 9.3 trillion Tanzanian Shillings.
Dr Mwigulu highlighted some of the notable achievements in Tanzanian capital markets, including the issuance of the groundbreaking "Kijani Bond," the first Green Bond with a substantial ticket size in Sub-Saharan Africa. The bond successfully raised 171.83 billion Tanzanian Shillings to finance environmentally friendly projects and businesses, achieving an impressive success rate of 430%. The Finance Minister credited these achievements to a conducive policy, regulatory, and operational environment fostered by President Dr Samia Suluhu Hassan.
Nicodemus Mkama, Chief Executive Officer of CMSA, in his presentation, noted that CMSA, in collaboration with stakeholders, is actively developing guidelines for the issuance of corporate and subnational ESG bonds. Mkama emphasized the crucial role regulators play in sustainable capital market development, asserting that enforcement of reporting and disclosure requirements is integral to achieving Nationally Determined Contributions (NDCs).