Tanzania’s economy, stock market show resilience in 2022
Tanzania’s economy has shown remarkable resilience in the face of the COVID-19 pandemic, with a GDP growth rate of 5.2% in the first half of 2022, according to recent reports.
Despite a projected growth rate of 4.7% for the full year, inflation has remained within the targeted range set by the Central Bank, with food and non-alcoholic beverages being the primary drivers of a slight rise in inflation to 5.4%.
The Tanzania Share Index, which consists of only domestic stocks, has been the star performer of 2022, with a 9% increase in value, primarily driven by the strong performance of the banking sector.
The All Share Index, which includes cross-listed stocks, has not fared as well, with a decline of 0.82%, mainly due to the weaker performance of cross-listed Kenyan stocks.
However, it is worth noting that the Banking, Finance, and Investment Index performed exceptionally well in 2022, closing up by 41%, while Twiga Cement was the top performer in the manufacturing sector, closing up by 9%.
These impressive performances reflect the potential for growth and development in Tanzania’s financial and industrial sectors, driven by a combination of macroeconomic factors, political stability, sectoral performance, foreign investment, regulatory environment, and market sentiment.
Looking ahead to 2023, there is reason to be optimistic about the prospects for Tanzania’s economy and stock market. Green bond issuances are expected to increase, reflecting the growing global interest in sustainable finance and investment.
Furthermore, the banking and manufacturing sectors are expected to continue their growth trajectory, with NMB and CRDB identified as strong performers in the coming year.
In terms of foreign investment, the potential is significant, with Tanzania’s strategic location, large population, and abundant natural resources making it an attractive destination for foreign investors. A buy-and-hold strategy in the current economic environment may be reasonable, as Tanzania’s economy and stock market show no signs of slowing down.
Overall, Tanzania’s economy and stock market have demonstrated impressive resilience and growth potential in recent years, with the prospect of further development and investment opportunities in the years to come.
Despite the challenges posed by the COVID-19 pandemic, Tanzania’s strong economic fundamentals and supportive policy environment suggest that the country is well-positioned to continue its upward trajectory in the years ahead.
