By Business Insider Reporter
In a move aimed at deepening financial inclusion and expanding investor participation in the domestic debt market, the Bank of Tanzania (BoT) has announced a tenfold increase in the ceiling for non-competitive bids in government securities auctions.
According to a public notice issued recently, the maximum amount for non-competitive bids has been revised upward from TSh50 million to TSh500 million per auction.
The change is part of the central bank’s broader strategy to strengthen price discovery mechanisms and encourage more widespread access to government-issued financial instruments.
The BoT serves as the fiscal agent of the Government and regularly conducts auctions of Treasury bills and bonds to finance public expenditure and manage monetary policy.
Non-competitive bidding allows investors – especially smaller institutions and individuals – to participate in auctions without having to compete on price.
Instead, they are allocated securities at the weighted average price (WAP) derived from competitive bids. This approach provides a more predictable investment experience for less sophisticated market players.
Broader market participation
The revised limit is expected to benefit a wider range of institutional and retail investors, including pension funds, insurance firms, saccos, microfinance institutions, and individual savers seeking stable investment opportunities.
By raising the cap, the central bank aims to increase liquidity in the primary market and improve capital mobilization for national development.
“This measure will encourage more investors to participate in government securities auctions, enhance market efficiency, and foster a more inclusive financial system,” said a senior financial analyst in Dar es Salaam.
Investors intending to place non-competitive bids must continue submitting applications through Central Depository Participants (CDPs), indicating auction date, number, tenure, and amount.
The allotment procedure remains unchanged.
Domestic resource mobilisation
The policy change also aligns with Tanzania’s goal of strengthening domestic resource mobilisation as a means to finance infrastructure projects and reduce reliance on external debt.
Government securities are a critical tool for raising funds internally while also offering investors a safe and reliable store of value.
In recent years, BoT has taken steps to modernise its financial markets framework, including the digitization of bond auctions and the integration of retail investors into the capital market ecosystem.
With this latest adjustment, the BoT reinforces its commitment to a more dynamic, accessible, and efficient domestic debt market – paving the way for greater citizen participation in Tanzania’s economic growth story.
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