From Savings to Ownership: Alpha Capital’s Vision for Tanzania’s Capital Market

The following article on the role of Tanzania’s capital market in financing Tanzania Development Vision 2050 (Dira 2050) was contributed by Alpha Capital, a Tanzanian investment advisory, brokerage and fund management firm, and written by its Chief Executive Officer, Gerase Kamugisha.

Alpha Capital Limited operates under the Capital Markets and Securities Authority (CMSA) and provides investment advisory, transaction advisory, brokerage and dealing, research and analysis, fund management, government securities trading, and corporate advisory services to individual, corporate, and institutional clients.

Kamugisha holds an MSc in Finance from the University of Strathclyde in Glasgow, United Kingdom, and a qualification in Tax Management from the Institute of Finance Management (IFM) in Dar es Salaam. He has more than two decades of senior public sector experience, including as Director of Research, Policy and Planning at the Tanzania Revenue Authority (TRA), Commissioner for Policy Analysis at the Ministry of Finance and Planning, and Director of Research, Policy and Planning at the President’s Delivery Bureau (PDB).

Introduction

Tanzania has entered an important phase in its economic transformation. As the country implements its long-term development ambitions under Dira 2050, how fast the economy grows will depend increasingly on how effectively Tanzania mobilises the capital, entrepreneurship and innovation required to sustain that growth.

The private sector will be central to this journey. Businesses will build factories, develop infrastructure, expand agriculture, create jobs, introduce technology and open new markets. The government will continue to provide policy direction, public investment and an enabling environment, but the scale of Tanzania’s ambitions cannot be achieved by public resources alone.

Why Tanzania’s Capital Market Matters for Vision 2050

This is where the capital market becomes strategically important.

A dynamic capital market provides the bridge between savings and productive investment. It allows businesses to access long-term capital while giving individuals and institutions the opportunity to become investors and owners of the enterprises contributing to Tanzania’s economic transformation.

Democratising Finance in Tanzania

At Alpha Capital, we describe our vision as “Democratising Finance”. We believe access to investment opportunities should not be limited to a small group of sophisticated investors. Tanzanians from different income groups, young professionals, entrepreneurs, institutions and members of the diaspora should increasingly have the opportunity to participate in the ownership of productive assets.

Alpha Capital’s aspiration is therefore to help move Tanzania from a culture of saving to a culture of investing and, ultimately, to a culture of ownership.

This transition matters for Dira 2050 because a successful transformation requires not only economic growth, but broad participation in the wealth created by that growth. When Tanzanians own shares in companies, invest in bonds, participate in collective investment schemes or invest through other capital-market instruments, they become participants in the country’s economic story rather than simply observers.

The opportunity is significant. Tanzania has substantial pools of household savings, pension assets, insurance funds, institutional capital and diaspora resources. The challenge is to connect more of these resources with productive opportunities. The capital market can provide that connection.

A More Diversified and Digital Capital Market

Over the next three years, we expect Tanzania’s capital market to become increasingly diversified. Equity markets will remain important, but we expect greater development of corporate bonds, collective investment schemes, infrastructure and thematic instruments, Shariah-compliant (Islamic) finance, green and sustainable finance, and other products designed around specific investor needs.

We also expect technology to fundamentally change how Tanzanians participate in financial markets.

The traditional model in which investing requires visiting a broker, completing physical documentation and navigating complex processes is giving way to a more accessible digital experience. Investors increasingly expect to open accounts, access information, transfer funds, execute transactions and monitor their portfolios through their phones and other digital platforms.

For Alpha Capital, technology is therefore not simply about operational efficiency. It is an instrument for financial inclusion.

Democratising finance means reducing the practical barriers that prevent ordinary people from participating in capital markets. It means making investment more accessible, understandable and convenient, and dispelling the myth that finance is only for elites. It also means investing in financial education so that accessibility is accompanied by informed decision-making.

We believe this is particularly important for Tanzania’s young population. Today’s young Tanzanians will increasingly need to build wealth through investments alongside employment and entrepreneurship. Giving them the tools and knowledge to become long-term investors can help create a generation that owns financial assets and participates directly in the growth of the economy.

From Remittances to Diaspora Investment

The same opportunity exists among Tanzanians living abroad. Diaspora capital is often discussed in terms of remittances. Remittances are important, but there is an opportunity to move beyond the concept of diaspora as a source of financial support towards diaspora as a source of investment and ownership.

A Tanzanian living in London, Dubai, Johannesburg or New York should increasingly be able to participate in Tanzania’s economic growth through investments in Tanzanian companies, bonds, funds and other capital-market products. Such participation can create a powerful connection between diaspora wealth creation and national development.

Financing Business Growth Through Capital Markets

The private sector will also need this capital. As Tanzanian companies grow, many will reach a point where bank financing alone is insufficient to support their ambitions. Expansion into manufacturing, agriculture, logistics, energy, technology, tourism and other sectors will require patient, long-term capital.

Capital markets can provide that capital. Equity financing can support expansion without creating conventional debt obligations. Corporate bonds can provide longer-term funding for established businesses. Collective investment schemes can aggregate smaller-denomination savings into meaningful pools of capital. Public listings can provide companies with access to a broader investor base while strengthening governance, transparency and institutional credibility.

In this sense, the capital market is not an end in itself. It is part of the economic infrastructure required to implement Dira 2050.

A stronger capital market can help transform Tanzanian businesses into larger, more competitive enterprises; enable entrepreneurs to access growth capital; channel savings into productive sectors; attract international investment; and allow more Tanzanians to share in the value created by economic expansion.

Alpha Capital intends to contribute to this process through investment management, brokerage, corporate advisory and capital-market solutions. Our objective is to help connect investors seeking opportunities with businesses seeking capital and to make that connection increasingly accessible to a much broader segment of society.

We are particularly optimistic about opportunities in Shariah-compliant finance, sustainable finance and innovative investment products. These can attract new pools of capital while responding to investors whose financial, ethical or environmental preferences have not always been adequately served.

A Deeper, Broader and More Inclusive Market

Ultimately, our vision for Tanzania’s capital market is straightforward. We want to see a market that is deeper, broader, more liquid, more digital and more inclusive. We want more Tanzanians to understand investment. We want more businesses to view the capital market as a natural source of growth capital. We want diaspora savings to become diaspora investment. And we want ordinary Tanzanians to have meaningful opportunities to become owners of the productive assets shaping the country’s future.

Dira 2050 is an ambitious national journey. The government has an important role, but the vision’s success will also depend on entrepreneurs, businesses, investors and financial institutions working together to mobilise the resources required for transformation.

At Alpha Capital, we believe the capital market is the most important bridge between these groups. Our vision is to help build that bridge, because Tanzania’s economic transformation should not only create growth. It should create ownership too.

GLOBAL ALPHA CAPITAL LIMITED
8th Floor, PSSSF Millennium Tower 1, Makumbusho-Kijitonyama, Dar es Salaam, Tanzania.
+255 762 367 347, +255 758 531 501, +255 750 013 880.
info@alphacapital.co.tz, www.alphacapital.co.tz.