Washington Gikunju
25 August 2008
Nairobi — The Tanzanian Government shall limit all sale of national assets to its citizens in its privatization programmes, the Bank of Tanzania (BOT) Governor has said.
Prof Beno Ndulu said on Monday that the Tanzanian Government had passed a resolution to give priority to its citizens in future privatisations of public assets held in trust by the State.
The Governor also said that the current lock out of non-Tanzanians from participation in the on-going National Microfinance Bank initial public offering (IPO) is an implementation of this directive.
"The Government resolved to limit the sale to Tanzanians since this is a public asset held in trust on their behalf, the shares shall however be available to everyone once they are listed," said Prof Ndulu.
The majority state-owned National Microfinance Bank (NMB) is to be listed at the Dar es Salaam Stock Exchange upon conclusion of the ongoing IPO.
The decision to lock out non-Tanzanians from the IPO comes after a similar move in April this year in which the Tanzanian Government barred its citizens from participating in the Safaricom IPO.
Prof Ndulu clarified that the Safaricom IPO restriction was occasioned by the country's foreign exchange controls, which limit foreign currency transactions in Tanzania.
"The Safaricom IPO ban was due to existing foreign exchange controls while the current reservation is a Government resolution," said Prof Ndulu.
The exchange controls are however expected to ease with the implementation of financial sector reforms already underway.
Prof Ndulu said the Tanzanian Government is currently working on modalities of lifting the exchange controls, but declined to give a precise time frame within which the reforms are to be implemented.
Impediment to EAC integration
Observers have viewed Tanzania's policy to bar its citizens and lock out foreigners from participation in regional initiatives such as IPOs as a potential obstacle to the ongoing East African political and economic integration efforts.
Kenya has already opened up its capital markets to all East African citizens, through a legal provision that recognizes East Africans as locals for purposes of investing in Kenya's capital markets.
Ugandans freely participated in the Safaricom IPO that was concluded in June this year, while Rwanda has already joined the Eastern Africa Stock Exchange and Capital Markets Associations.
Kenyans also widely participated in the Stanbic Bank Uganda IPO that was held last year.
Three Kenyan companies; East African Breweries, Kenya Airways and Jubilee Insurance have also cross listed their shares for trading in all the three regional bourses.
Others, such as KCB, have already announced their intentions to cross-list their shares on the DSE and the Ugandan Securities Exchange (USE).
Kenya's Permanent Secretary for East African Community, David Nalo, said last week that there is a need for regional policy harmonization, which would then pave way for closer economic cooperation.
An example of a policy difference that has delayed integration of the three East African Stock Exchanges is the non-recognition of automated trading at the USE, which required the passage of a parliamentary Act early this year to implement.
Be the first to Write a Comment!
Copyright © 2008 The Nation. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
