Tanzania 2025 market outlook

Tanzania is setting the stage for a transformative year in 2025 with the recent drafting of guidelines on reporting sustainability-related risks and opportunities for banks and financial institutions. This move is expected to have a significant impact on market growth in the country. Imani Muhingo, Senior Manager of Securities Brokerage Services at CRDB Bank Plc, shed light on this development and discussed Tanzania's broader market outlook for the upcoming year in an exclusive interview with CNBC Africa. Muhingo highlighted the importance of ESG (Environmental, Social, and Governance) factors in the banking industry and the overall market landscape in Tanzania. The country has been proactive in addressing environmental and ESG concerns, with regulatory bodies like the DSC and CMSA implementing reporting standards and sustainable bond issuances. Tanzania has already seen approximately 700 million shillings of sustainable bonds issued, indicating a growing trend towards ESG compliance and sustainable practices among financial institutions. Muhingo emphasized that large banks, such as CRDB, are well-positioned to meet these standards, as they are listed on the ISM Stock Exchange and have already aligned with existing ESG regulations. The new guidelines are expected to further enhance ESG adoption in Tanzania and create new opportunities for sustainable investments. Looking ahead to key sectors that will likely drive Tanzania's economic growth in 2025, Muhingo identified the financial and agriculture sectors as frontrunners. The financial sector has experienced robust growth in recent years, with double-digit credit growth and significant performance on the ISM Stock Exchange. CRDB, in particular, has showcased strong profit growth and price appreciation, making it an attractive investment option. Agriculture has also emerged as a key sector for credit growth, supported by government initiatives and investments in cash crops like cashew, which have bolstered the country's economy. Additionally, Muhingo pointed out the potential growth in sectors such as construction and technology, signaling diverse opportunities for investors and businesses in the Tanzanian market. In the realm of bonds and fixed income markets, Tanzania witnessed notable developments in 2024, including the issuance of the first infrastructure bond to support road construction projects. The bond, aimed at enhancing infrastructure in rural and urban areas, marks a significant milestone in the country's financial landscape. Treasury bonds auctions were oversubscribed, indicating strong public engagement and confidence in government securities. Furthermore, financial institutions have leveraged bond issuances as a crucial source of financing, reflecting the evolution of Tanzania's financial sector and the increasing focus on financial literacy. Overall, Tanzania's market outlook for 2025 appears promising, with a strategic emphasis on sustainability, sectorial growth, and innovative financing mechanisms, setting the stage for a dynamic and resilient economy in the years to come.