Need for Active Secondary Market for Government Securities

TLDR

• With Dira 2050 placing private-sector investment at the centre of Tanzania’s development ambitions, the country will need substantially more long-term capital to finance businesses, infrastructure and economic expansion.
• TANZANIA: THE Bank of Tanzania’s launch last week of Tanzania’s Sovereign Yield Curve may not have attracted the same public attention as a major policy announcement or a large government investment.
• Tanzania therefore needs a deeper and more active secondary market for government securities.
• Active secondary trading generates price information, enables investors to manage their portfolios and allows the market to respond more quickly to changes in economic and monetary conditions.
• The authorities and market participants will need to strengthen secondary-market liquidity, encourage wider participation, improve price transparency and ensure that the curve continues to reflect credible market.