Tanzania Ranks 9th Among Africa’s Financial Markets as Bond Demand and Money Market Reforms Lift Its Score

Tanzania has ranked ninth among 29 African economies in the 2026 Absa Africa Financial Markets Index, improving its overall score to 62 from 60 a year earlier as money market reforms, heavily subscribed bond issues and the launch of the country’s first exchange traded funds strengthened parts of its financial market. The improvement places Tanzania behind South Africa, Mauritius, Namibia, Uganda, Kenya, Ghana, Botswana and Nigeria, but ahead of markets including Morocco, Egypt, Rwanda and Zambia. The ranking also shows an important distinction: Tanzania’s score improved even as its position slipped from eighth to ninth because several competing African markets advanced more quickly. The Absa Africa Financial Markets Index, produced by OMFIF in association with Absa, evaluates countries across six areas covering market depth, access to foreign exchange, market transparency, pension fund development, the macroeconomic environment, and legal and regulatory standards. Tanzania’s 2026 profile is uneven. It scores strongly in market transparency and macroeconomic conditions, moderately in foreign exchange access and legal standards, but remains considerably weaker in market depth and pension fund development. Those differences matter because they show that Tanzania has made progress in building the institutions and rules around financial markets faster than it has built the scale, liquidity and investor participation required for a genuinely deep capital market. Tanzania’s Score Is Improving, But Its Market Is Still Shallow Tanzania’s overall score of 62 is its strongest reading in the recalculated five year series contained in the 2026 report. Under the revised methodology, Tanzania scored 60 in 2022, fell to 58 in 2023, recovered to 61 in 2024, eased to 60 in 2025 and then climbed to 62 in 2026. This means the latest improvement is not a sudden transformation but part of a gradual strengthening of the financial system over several years, with individual areas advancing at different speeds. The strongest improvement came in market depth, where Tanzania’s score rose by nine points to 43. The index measures market depth through the size and liquidity of equities and bonds, product diversity, market infrastructure and the existence of systems such as primary dealers and active horizontal repo markets. Tanzania’s score remains modest compared with South Africa’s 92 or Egypt’s 59, but the nine point increase was significant and reflected reforms that made some parts of the domestic capital market more functional. The report specifically identifies positive turnover in Tanzania’s horizontal repurchase agreement market as one of the developments that improved its score. Repo markets allow financial institutions to borrow and lend short term using securities as collateral, making them important to liquidity management, monetary policy transmission and the wider functioning of bond markets. Tanzania joined Egypt, Namibia and Benin among countries where repo market activity contributed to stronger market depth scores in 2026. This matters because a financial market is not deep simply because bonds and shares have been issued. Depth depends on whether those instruments can be traded, used as collateral, priced continuously and incorporated into functioning money markets. Tanzania’s reforms therefore address a layer of financial infrastructure that is less visible than a stock exchange listing but central to how efficiently capital moves between banks, investors and the government. Bond Demand Is Becoming One Of Tanzania’s Strongest Market Signals The 2026 report repeatedly highlights Tanzania’s heavily subscribed bond issues as one of the principal developments supporting its stronger financial market performance. It also identifies the launch of Tanzania’s first exchange traded funds alongside money market reforms as significant developments during the 2025 to 2026 review period. Strong bond subscriptions indicate that domestic investors are willing to commit significant capital to fixed income securities, providing government and other issuers with a reliable source of local currency financing. This is particularly important in African economies because deeper domestic debt markets can reduce dependence on foreign currency borrowing, where governments are exposed to exchange rate movements and global financing conditions. But strong demand for bonds can also expose a structural weakness if government securities absorb most available domestic investment capital. The AFMI report warns that large government debt issuance and high yields can crowd out equities and corporate bonds in several African markets. When banks, pension funds and insurers can earn attractive returns from government securities, they may have less incentive to finance companies through corporate debt or equity. Tanzania’s challenge is therefore not simply to sell more government bonds. It is to use the development of the sovereign debt market to create benchmarks, pricing infrastructure and investor confidence that can eventually support a larger corporate bond market and more equity financing. A functioning government yield curve can help investors determine the price of risk across different maturities. Corporate borrowers can then be priced relative to the sovereign benchmark rather than negotiating financing in a market with limited reference points. If that transition occurs, Tanzania’s bond market could begin supporting private investment rather than remaining primarily a financing channel for the state. Transparency Is Already One Of Tanzania’s Strongest Areas Tanzania performs considerably better on market transparency than it does on market depth. It scored 85 out of 100 in Pillar 3, ranking seventh among the 29 economies covered by the index. Only South Africa, Kenya, Egypt, Ghana, Nigeria and Uganda scored higher. The transparency pillar measures the availability and quality of financial information, sovereign and corporate credit ratings, monetary policy communication, fiscal transparency and macroeconomic data. Tanzania receives strong marks because much of that basic information architecture is already in place, including high scores for financial transparency, monetary policy transparency, fiscal disclosure and macroeconomic data publication. The report also identifies Tanzania as one of the countries whose sovereign credit rating coverage improved. Tanzania gained an additional international sovereign rating in the period reviewed, while Fitch affirmed the country at B+ with a stable outlook in March 2026, citing relatively strong economic growth, low inflation and reforms intended to improve access to external funding. This is economically relevant because market transparency reduces information costs. Investors demand higher returns when they are uncertain about government finances, inflation, monetary policy or the condition of companies issuing securities. Better and more timely information does not automatically produce investment, but it reduces one category of risk that can otherwise keep capital out of a market. Tanzania is also developing a daily sovereign yield curve, which the report says could improve pricing transparency. If implemented effectively, such a curve would help investors compare securities across maturities and provide a clearer benchmark for pricing corporate debt. Foreign Exchange Access Remains Adequate, But Liquidity Is Weak Tanzania scored 60 in access to foreign exchange, broadly placing it in the middle of the 29 markets. The country receives a relatively strong score for foreign exchange arrangements and controls and a perfect score for reporting standards, but its foreign exchange liquidity score remains only 10. That difference is important. A country can have clear rules, publish exchange rate information consistently and maintain a reasonably open foreign exchange framework while still having a shallow interbank market. For investors, practical access to foreign currency depends on whether banks and other market participants can trade enough foreign exchange at transparent prices, not simply whether the regulations permit them to do so. Tanzania’s foreign exchange profile therefore shows a recurring pattern in its wider financial system: institutional architecture is stronger than market activity. The rules exist, reporting is good and access is relatively open, but trading depth remains limited. For foreign investors, that can become a significant consideration. An investment can perform well in local currency terms, but the investor still needs to convert dividends, bond proceeds or sale proceeds into dollars, euros or another currency when exiting the position. Thin FX liquidity can therefore increase the effective risk of investing even when the underlying asset is sound. Pension Capital Is Tanzania’s Weakest Major Link Tanzania scores only 35 in pension fund development, placing it tenth among the 29 economies in this pillar and substantially behind Namibia and Eswatini, both of which score 100. The issue is not simply the amount of pension savings accumulated. What matters is how those savings interact with domestic capital markets. Pension funds can provide long term capital for government bonds, corporate debt, equities, infrastructure and other productive investments, but that requires both a sufficiently large pension industry and a market offering enough viable investment opportunities. The report identifies an especially important weakness in Tanzania: corporations hold more than half of listed equities while domestic institutional investors account for less than 5 percent. Ghana and Nigeria show a similar pattern. That means Tanzania has institutional savings but relatively little of that capital is actively supporting listed companies through equity ownership. The implication extends beyond the stock market. A stronger domestic institutional investor base could improve liquidity, encourage companies to list, provide stable demand for corporate bonds and increase the amount of long term financing available to businesses. This helps explain why Tanzania can score strongly on transparency while remaining much weaker on market depth. The institutions governing markets can be improved through regulation and policy, but liquidity ultimately requires investors willing to trade and companies willing to issue securities. Tanzania Is Stronger On Macroeconomics Than On Capital Mobilisation Tanzania scored 85 in the macroeconomic environment pillar, placing it seventh among the 29 economies reviewed. That reflects relatively favourable performance across growth, inflation, external debt and non performing loans. A stable macroeconomic environment gives capital markets a better foundation. High inflation makes long term local currency assets difficult to price, excessive debt can absorb available domestic savings, currency instability increases risk and large volumes of non performing loans weaken financial institutions. Tanzania’s relatively strong macroeconomic score therefore provides conditions that should, in principle, support deeper capital market development. But the gap between Tanzania’s 85 in macroeconomic conditions and 43 in market depth is revealing. The economy may provide a relatively stable environment, yet capital markets remain far less developed than those macroeconomic fundamentals might allow. This is where the policy challenge becomes clearer. Tanzania does not only need better macroeconomic management. It needs more companies issuing securities, more institutional investors participating in equities and corporate bonds, more active secondary trading and a broader range of financial products that attract capital away from a narrow concentration in government debt. East Africa Is Becoming One Of Africa’s Stronger Financial Regions The 2026 ranking also places Tanzania inside an increasingly strong East African financial market cluster. Uganda ranks fourth overall with a score of 68, Kenya fifth with 65, Tanzania ninth with 62 and Rwanda sixteenth with 55. That regional concentration matters because East African financial markets do not have to develop independently. Cross border listings, regional investment funds, interconnected exchanges and harmonised financial market infrastructure can increase the effective investor base available to individual countries. Uganda performs particularly strongly in foreign exchange access, Kenya leads the continent alongside South Africa in market transparency, while Tanzania’s recent progress has been concentrated in money markets, bond issuance and new financial products. Each country therefore brings a different strength to a potential regional market. The deeper opportunity is to combine those strengths. A Tanzanian company able to access Kenyan, Ugandan and regional institutional investors would face a larger pool of capital than the domestic market alone can provide. Similarly, investors would have more securities to choose from if regional financial infrastructure made cross border investment easier. This is particularly important because many African national capital markets are individually too small to generate deep liquidity across every financial instrument. The AFMI report explicitly argues that regional integration can provide access to broader investor bases and more securities when national markets lack enough scale on their own. The Ranking Is Encouraging, But Ninth Place Should Not Be Mistaken For A Deep Market Tanzania’s ninth place position is a positive result, particularly because its overall score increased from 60 to 62 and several important parts of its market infrastructure improved. Money market reforms, heavily subscribed bonds, new exchange traded funds, stronger transparency and credit rating developments all point towards a financial system becoming more sophisticated. But the ranking should not obscure the structural weaknesses that remain. Tanzania scores only 43 in market depth, 35 in pension fund development and just 10 on the foreign exchange liquidity component. The stock of financial infrastructure is therefore developing faster than the level of trading and institutional participation required to make markets genuinely deep. The next phase of financial market reform will need to move beyond creating products and institutions. Tanzania needs more active turnover in equities and bonds, a larger pipeline of corporate issuers, deeper participation by pension funds and insurers, more liquid foreign exchange markets and stronger mechanisms for moving domestic savings into productive private investment. The 2026 index therefore gives Tanzania two messages at the same time. The country has built enough financial infrastructure to rank among Africa’s ten strongest markets, but the distance between having a market and having a deep market remains substantial. For Tanzania, the next test is no longer whether the institutions of a capital market exist. It is whether businesses can actually raise meaningful amounts of long term capital through them. FAQ Where does Tanzania rank in Africa’s financial markets in 2026? Tanzania ranks ninth out of 29 economies in the 2026 Absa Africa Financial Markets Index, with an overall score of 62. Did Tanzania improve in 2026? Yes. Tanzania’s overall score rose from 60 in 2025 to 62 in 2026. However, its ranking moved from eighth to ninth because other markets improved more quickly. What drove Tanzania’s improvement? The report highlights money market reforms, heavily subscribed bond issuance and the launch of Tanzania’s first exchange traded funds. Tanzania’s market depth score also rose by nine points to 43. What is Tanzania’s strongest financial market area? Tanzania performs particularly strongly in market transparency and the macroeconomic environment, scoring 85 in both pillars. What remains Tanzania’s biggest weakness? Market depth and pension fund development remain relatively weak. Tanzania scores 43 for market depth and 35 for pension fund development, while foreign exchange liquidity is also shallow. How does Tanzania compare with East African peers? Uganda ranks fourth overall, Kenya fifth, Tanzania ninth and Rwanda sixteenth in the 2026 index.