How to Invest in Tanzania

47

This guide is for intrepid investors who are wondering how to invest in stocks in Tanzania and the Dar es Salaam Stock Exchange (DSE). Curious about investing in other frontier markets? Check out a list of our guides here.

Tanzania is a country of just over 55 million people located in East Africa. It is home to beautiful national parks and tourists looking for an African safari experience will usually choose Tanzania for their travels. While tourism contributes to almost a fifth of GDP, Tanzania remains very poor, with a GDP per capita of just $3500 USD in PPP terms.

While Tanzania has been transitioning into a more liberal economy since 1985, progress has been slow and the poverty rate remains just under 50%. On the other hand, its economy is growing quickly in percentage terms with GDP growth at 7.1% in 2017, the fastest of its regional counterparts.

Its economy is reliant on subsistence agriculture and mining, which also represent the two largest types of exports it has. As a result, Tanzania has an Economic Complexity score of -1.01, meaning it is very primary resources based (we usually look at a score of zero as the cut-off for whether an economy is developed enough to be considered an emerging market).

Tanzania’s main stock exchange is the Dar es Salaam Stock Exchange (DSE), which was founded in 1996.

Notable Companies in Tanzania:

  • Tanzania Breweries (TBL, listed): the largest company on the DSE by market cap, Tanzania Breweries is the main alcoholic and non-alcoholic beverage producer/distributor in Tanzania.
  • East African Breweries (EABL, listed): the second largest company on the DSE by market cap is also a brewery, but focuses only on alcoholic drinks.
  • Acacia (ACA, listed): one of the largest gold producers in the country, with three mines in north-west Tanzania
  • Tanzania Cigarette Company (TCC, listed): the largest tobacco company in Tanzania (tobacco is also the country’s main agricultural export), majority owned by Japan Tobacco Inc.
  • Vodacom (VODA, listed): the largest telecom company in Tanzania

Some other large companies listed on the DSE are the subsidiaries of larger Kenyan companies, including KCB Group (the banking group) and Kenya Airways.

Is It Safe To Invest In Tanzania?

According to our Investment Safety Rankings, Tanzania is ranked #127 out of 192 countries on our list, making it a relatively risky country to invest in, but slightly above average when compared to the rest of Africa.

Can Foreigners Invest In Tanzania?

Yes, foreigners are allowed to invest in Tanzania and its stock exchange.

The only restrictions are that foreign investors are only allowed to invest up to 60% in aggregate of the shares in a company.

Dar es Salaam Stock Exchange (DSE) Snapshot:

In operation since: 1996

Location: Dar es Salaam, Tanzania

Market hours: 08:00 to 17:00 while trading is done from 10:30 to 12:00, Monday to Friday

Currency: Tanzanian Shilling (TZS)

Market Capitalization (as of Oct 2018): 20,370 billion TZS ($9 billion USD)

Local Listed companies (as of Oct 2018): 28 listed stocks

Taxes: Capital gains tax of 20%, dividends withholding tax of 10%

Foreign currency controls: investors will need to have proper documentation to get money back out of the country

Main Index: All Shares Index (DSEI); Tanzania Share Index (TSI) is the secondary index

How the Stock Exchange of Tanzania is Structured:

With just 28 listed stocks, the structure of the DSE is relatively straightforward. There is just one market for equities, and no development or specialized industry boards.

Government bonds are the only other significant security traded on the exchange. While corporate bonds are technically listed, they do not trade often, with less than $150,000 USD worth of corporate bonds traded in the previous year.

How to Invest in the Dar es Salaam Stock Exchange of Tanzania:

To invest on the DSE, investors need to open an account with a licensed broker/dealer authorized by the exchange.

There are currently 14 investment dealers approved by the DSE. The full list can be found here, but here are the 14 companies:

  1. Core Securities
  2. Tanzania Securities
  3. Solomon Stockbrokers
  4. Tib Rasilimali
  5. Optima Corporate Finance
  6. Orbit Securities Company
  7. Vertex International Securities
  8. Zan Securities
  9. E.A. Capital
  10. Arch Financial & Investment Advisory
  11. Smart Stock Brokers
  12. Prudential Capital Group
  13. Victory Financial Services
  14. Fimco

Make sure to check out our other investing guides here!

1 COMMENT

Leave a Reply