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Tanzanian Government Urges Institutions to Issue More Bonds After Tanga Water Authority Bond Oversubscribed

Mwigulu Nchemba

The Minister of Finance, Hon. Dr. Mwigulu Lameck Nchemba, has directed government institutions to use alternative project financing methods for development projects instead of relying solely on the government budget.

This directive was issued on his behalf by the Minister of Construction, Hon. Innocent Bashungwa, during the listing ceremony of the Tanga Urban Water and Sanitation Authority (Tanga UWASA) green bond on the Dar es Salaam Stock Exchange (DSE), which took place in Dodoma.

The bond, worth TZS 53.12 billion ($20.8 million), was launched on February 22, 2024, and listed on the DSE on May 15, 2024. The bond, with a return of 13.5% paid semi-annually, was oversubscribed by 103%, with 65% of the collection coming from local investors and 35% from foreign investors.

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The capital raised will be used to improve the water infrastructure and double the current production capacity from 30,000 cubic liters to 60,000 cubic liters, ensuring that the water supply reaches 100% of the Tanga population, up from the current estimated 96%.

Hon. Bashungwa stated that financing development projects through alternative means will enable the government to focus on more areas and improve the lives of Tanzanians. “All the funds needed for the implementation of the Tanga UWASA project have now been secured. The Ministry of Finance will continue to closely monitor to ensure that this project is successfully implemented as planned,” he said.

He also congratulated everyone who participated in one way or another in making this event successful and urged other government institutions to emulate this example.

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For his part, the Minister of Water, Hon. Juma Aweso, stated that in the past, the Ministry of Water was a source of complaints and grievances, but now the President of the United Republic, Hon. Dr. Samia Suluhu Hassan, has made significant reforms that have greatly alleviated water issues.

He said it is very rare to see a public institution undertake a significant initiative like listing a bond on the stock markets, making Tanzania a model for many countries.

For her part, the Permanent Secretary of the Ministry of Finance, Dr. Natu El-maamry Mwamba, said that this event is important as it implements the government’s goal of executing development projects using innovative sources.

As the government’s leading payer, she is greatly relieved to see innovation in finding alternative revenue sources that ease the burden on the General Government Fund.

She also said the government will continue to collaborate with the private sector in contributing to national development.

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