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.

 

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