Tanzania: Stock Markets to Ensure Equitable Economic Development

Moremi Marwa, CEO of Dar es Salaam Stock Exchange, shares a personal message with foreign and local investors, explaining why it is important to consider stock markets to ensure equitable economic development and social prosperity.

“It is important that there is an equitable economic development of the country for social prosperity of many. Stock markets are some of the tools that enable many people to participate in the ownership of their economy. Therefore, it is arguably right to encourage local and foreign companies operating in our economy to consider sharing their prosperity and losses with the local community via listing their companies in the local exchange. Currently, the practice is that foreign companies operating in sectors such as mining, extraction, telecommunications, infrastructure, tourism and hospitality, do raise funds from outside the country and these funds gets invested here, therefore operations and profitability will be generated here but the money will go back to investors where those funds were mobilised. For extractives as an example, it will be either Toronto, London, Johannesburg or New York. Therefore, my opinion is that it will be proper, for the sustainability of these businesses and the society in which their operations are based, to consider to use the local capital market. Because we are operating in a globalized economy and the fact is that we don’t limit foreign investors to participate in our local market, I can’t see why companies should not, during their capital raising process, float a relatively small portion of their shares in the local market here and then local investors, retail as well as institutions also participate through ownership in these companies and during that process, investors from across the world will also access these companies via this exchange and I think that’s what will be key in terms of creating an equitable society and for the sustainable existence of these companies, because otherwise people tend to think that since they’re not allowed to participate through ownership in these companies, then they are not part of the economic growth. Despite the almost 7 percent growth that we have been experiencing over the last 20 years, if you look at the GDP per capita, one will see that the GDP growth is not reflected in people’s lives. One of the tools that can be used to bring this reflection is to encourage companies to allow other people within the society to share in the ownership of assets that are key to the GDP growth”, says Moremi Marwa.