15 April 2014

Tanzania: Local Firms Urged to Invest in Oil, Gas Sector

DOMESTIC investors have been called upon to make full utilisation of the country's capital markets to raise low cost capital to invest in the abundant opportunities in the oil and gas sector.

This was said by the Dar es Salaam Stock Exchange (DSE) Chief Executive Officer Mr Moremi Marwa during the monthly CEO Roundtable (CEOrt) held at the weekend in Dar es Salaam.

Mr Marwa identified the DSE's initiatives and strategies on long-term capital raising to promote private sector participation within the emerging oil and gas sector.

It is of paramount importance to have a strong local content in the nascent oil and gas industry but without facilitation and empowerment for harnessing the lucrative investment opportunities.

The stock market has proved to be the most efficient source of generating low cost capital. With the equity market, companies may raise capital for long-term purposes, such as for a merger or acquisition, to expand a line of business or enter into a new business, or for other capital projects.

Similarly, companies may decide to raise money by issuing equity on the stock market.

Also during the CEOrt, DSE boss underscored the equity market's initiatives for making listing and investment conditions within the stock exchange less stringent and public awareness campaigns for alternative access to capital.

Opportunities offered in the bond market, companies may issue debt instruments in the form of corporate bonds, while the government through the Bank of Tanzania (BoT) issue debt in the form of government bonds for development spending particularly for long term projects like infrastructure investments.

The panel discussion addressed the importance of the local content development with a focus on the Oil and Gas sector and explored collaborative efforts to ensure private sector participation and economic inclusion in the country.

Mr Derek Hudson with over 20 years' experience in the Oil and Gas sector provided insights on BG Tanzania's long term strategy and opportunities for private sector participation along the natural gas value chain.

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