NAIROBI, Kenya, Sept 3 – The Tanzanian government has assured Kenyan investors that they will in the near future be able to participate in its stock market without any restrictions.
Prime Minister Mizengo Peter Pinda said on Thursday that close cooperation among the East African countries would help Tanzania overcome challenges and fears that hinder it from fully opening up its markets.
“My feeling is that we are soon going to reach a stage where we are going to say, a Kenyan is not a foreigner to Tanzania and so its true for a Tanzanian in Uganda, Rwanda, Burundi,” he said when he visited the Nairobi Stock Exchange (NSE).
He added that this would be possible when the five regional countries strived to create a strong East African Community (EAC).
The Premier was responding to NSE Chief Executive Officer Peter Mwangi’s plea to have Kenyans treated like local investors when they participate in the country’s capital markets transactions.
“Honourable Prime Minister, our request to you is that Tanzania can reciprocate and allow Kenyan investors to participate in equity and bond offerings and all the other opportunities in that market,” the CEO implored.
Tanzania has on several occasions locked Kenyans from participating in their equity and bond issues, a move that has been interpreted as retaliatory because they were unable to participate in the mobile Safaricom IPO.
For instance, Kenyans and Ugandans were not allowed to take part in the National Microfinance Bank Initial Public Offer for fear that trading in such shares would destabilise the country’s foreign exchange position.
Mr Pinda however said the integration of not only the region but the East Africa capital markets was inevitable as it is a necessary tool for development.
“For those who have been able to use this tool properly, they have been able to harness the benefits,” he said while calling on the partner states not to lose sight of this objective.
The past 10 years has seen significant steps taken towards harmonising the regulatory and policy frameworks for capital markets across the region.
Regional associations that operate under the umbrella body of the East Africa Securities Regulatory Authorities (EASRA) have been formed to spearhead specific initiatives within the regional integration agenda.
Already various proposals such as the reservation of 40 percent of shares during IPOs for East African investors and the adoption of common standards for market regulation and information sharing have been approved.
The Kenyan government for example treated all EAC citizens as local investors and charged a withholding tax at five percent as applicable to Kenyans.
Such initiatives have also seen the number of East Africa investors at the NSE increase massively in the last four years from 52 in January 2005 to 10,849 as at June this year.
Kenya’s Deputy Prime Minister and Minister of Finance Uhuru Kenyatta concurred with the Tanzanian Premier but added that there’s need to have political leadership to move the integration process forward and quickly.
“What we now need is to ensure that we give greater political commitment and encouragement to our respective people to be able to move in a manner that will allow us all to achieve our dreams of becoming a middle income region in the shortest time possible,” Mr Kenyatta added.
He reiterated the government’s commitment to the process and commended the Premier for his visit to the country saying it was an indication that Tanzania’s pledge to the realisation of an integrated East African market.
The country has time and again been accused of frustrating the adoption of resolutions geared towards the integration process.