TANZANIA should finance infrastructure development through their local capital markets to close the transportation gap in a timely fashion.
The country is expected to start
debt-bond-markets where domestic savings are intermediating and be able
to finance infrastructure projects. The Dar es Salaam Stock Exchange
(DSE), Chief Executive Officer Mr Moremi Marwa said the move may
leverage efforts of closing infrastructure deficits in Tanzania and
Africa as whole.
“Our markets (despite being relatively
small) need to be developed slowly by central governments, municipals,
parastatals issuing bonds in local markets where both domestic and
international players freely access them,” Mr Marwa said in a statement.
The CEO said recently some Africa countries accessed international markets “with total disregard of the local markets”.
For instance, in the last past seven
years more than ten African countries have raised considerable amount
from international capital markets in the form of Eurobond.
“Traditionally,” Mr Marwa said, “most
African countries, with exceptional of South Africa, have not
consciously seen the capital market as a capital source of finance.”
Yet, the expert urged, raising debt
financing in the exchanges is one of the most potent sources of finance
for rapid infrastructure development.
Report on the implementation of
2015/2016 budget showed that development plan as of last month, only 1.8
tri/- out of 5.9tri/-was released to carry out various development
projects.
That gap could have been taken care with
funds from capital markets. According to Africa Development Bank (AfDB)
reports road access in Africa is only 34 per cent as compared to 50 per
cent in other developing regions.
Not only that total electricity
generated by Africa’s 52 countries for its billion people is equivalent
to what is being produced and consumed by a single nation-Italy.
There are cases where the total
electricity generated in an African country, such as Tanzania, is not
enough to power even a single airport such as Schiphol’s Airport in
Amsterdam, in Netherland.
Mr Marwa said the country’s balance
sheet in often cases lacks the fiscal space to accommodate the
substantial financial outlays required for infrastructure development
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