CMSA mulls removing restrictions on capital movement next year

                                              Capital Markets and Securities Authority (CMSA)
The Capital Markets and Securities Authority (CMSA) is contemplating to lift all restrictions which have been limiting the free movement of capital to and from the country before the end of the next year.

This was revealed by an official with the CMSA, Nicodemus Mkama, at the just ended CRDB Bank Annual General Meeting (AGM) held in Arusha last week.
“Removing the limits of capital movement is a priority that would see increased inflows of investments as well as ample opportunities for investors to invest in the region,” he said.

He said it is a unique opportunity for CRDB bank and other banks to go for the investment opportunities offered by the region’s equity markets as well as stretching wings into other EAC member states.

For example, the restriction on foreign investors to buy over 60 per cent of shares in firms listed at the Dar es Salaam Stock Exchange (DSE) will be lifted before the end of next year. In Kenya, Uganda and Rwanda there are no restrictions as movement is 100 per cent liberalised.

Also, the limitation for foreign investors to participate in the money markets and especially in the trading of government debt securities will be removed before the year end. Other member states like Kenya, Uganda and Rwanda have already liberalised this aspect, he said.

Mkama from the Directorate of Legal Affairs and Enforcement, said for listed firms, cross listing is an excellent opportunity to access low cost capital which is necessary for their expansion in the region.

For example, with CRDB, crossing the border means, the bank would pursue projects which were impossible by being in DSE only.

CRDB bank’s Managing Director Dr Charles Kimei said being listed at the DSE was of paramount importance but by cross listing is of more significance to both the bank and the country’s economy at large.

“Logically, restricting of foreign investors by only 60 per cent participation in buying shares from DSE listed firms is a missed opportunity as the country is struggling to attract more investments,” he said.

He added, the same is true if domestic investors cross the country’s borders to invest outside. By this, it implies that the gains and other benefits will be brought back home which is healthy to the economy.  source The Guadian

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