The Bank of Tanzania (Central Bank) offers Treasury Bills in an interval of two weeks and Treasury Bonds for investment. Auctions are conducted at regular interval through a competitive tender process in the Primary Market. The issued Government Securities (Bonds) are listed in the Dar es Salaam Stock Exchange where secondary trading takes place.
IMPORTANT: Government Securities are now open to East African Residents to invest up to a limit of 40%.of the total successful bids.
- Treasury Bills
Treasury Bills are short-term securities maturing within a year. In the Primary Market, the Bank of Tanzania [BOT] issues T-bills for the first time on a fortnightly basis.
BOT issues on T-bills in four categories with maturities as follows:
- 35 days T-bills
- 91 days T-bills
- 182 days T-bills
- 364 days T-bills
For successful bids, settlement is T+1. On maturity, investors receive face value [100%] of the respective T-bill. Income earned from T-bills is subject to the applicable withholding tax 10%.
- Treasury Bonds
Treasury Bonds are long-term securities with maturity longer than a year. In the Primary Market, the Bank of Tanzania [BOT] issues T-bonds at regular interval [on monthly basis], there after sales and purchases of T-bonds are traded in the Secondary Market [at Dar es Salaam Stock Exchange].
BOT issues different categories of T-bonds maturities:
- 2 year T-bonds
- 5 year T-bonds
- 7 year T-bonds
- 10 year T-bonds
- 15 year T-bonds
Successful bids settlement is T+1. Interest payment on the T-Bonds are Semi-annually.. On maturity investors receive par value amount plus the accrued interest.
NOTE: with T Bonds, income derived is tax exempted.
Advantages on investing in Government Bonds are:
- Risk free instruments as they are issued by the Government;
- They are transferable and negotiable;
- They can be pledged as collateral security;
- Rate of return on Government Securities is competitive.