Report ranks Tanzania No.14 in continental bond market

Dar es Salaam. Tanzania has been ranked No. 14 among 54 countries with the highest bond markets in Africa.

That is shown in the 2017 African Bond Market Development Index.

According to the report published by African Development Bank (AfDB), Tanzania scored 39.71 points in 2017, a decrease from 47.49 points in 2016 and 50.95 points in 2015.

For East Africa, the index has shown that Kenya was leading after being ranked the seventh, followed by Uganda, which was ranked the 13th. Rwanda was ranked the 16th, with Burundi being the 40th

On bond market infrastructure, Tanzania was No. 11 among all countries behind Senegal, Niger, Namibia, Mali, Ghana, Burkina Faso, Cape Verde, Egypt and Lesotho.

It was the 12th with the highest domestic investor base in Africa but the second in East Africa behind Kenya.

The continental bank noted that Kenya was the fifth largest bond market in Africa in 2016 and maintains its efforts to improve liquidity and deepen the bond markets.

The investor base for each country was determined by combining the total assets held by pension funds, mutual funds and insurance companies.

The index shows that South Africa was the first followed by Botswana, Egypt, Namibia and Mauritius while Somalia, South Sudan and Liberia trailed.

“South Africa remains the benchmark for the African market owing to its sophisticated bond market coupled with efficient electronic trading and settlement processes,” says the AfDB report.

“Bond markets have long been a stable and reliable source of long-term financing for governments and companies in the world, serving as a mechanism for the transformation of savings into financing for the real sector, thus constituting an alternative source of funding to bank financing,” says AfDB.