Africa-Press – Tanzania. Tanzania’s long-term government securities are enjoying unprecedented investor demand, with the latest 25-year Treasury bond auction attracting bids worth over Sh1.2 trillion, the highest in the nation’s history.
Market analysts say the record-breaking performance underscores strong investor confidence in Tanzania’s long-term economic prospects.
Data from the Bank of Tanzania (BoT) shows a consistent trend in 2025 of falling yields and heavy over-subscription for long-tenor bonds, culminating in the latest milestone.
At the auction held on August 6, the government offered Sh264.31 billion worth of 25-year bonds. Investors responded with Sh1.23 trillion in tenders, more than four times the amount on offer.
The momentum has been building since the start of the year. In January, the 25-year bond auction drew Sh489.49 billion in tenders against Sh247.97 billion offered, while the April sale of 20-year bonds attracted Sh760.57 billion against an offer of Sh213.05 billion.
Over the period, yields have fallen steadily. The 25-year bond’s yield to maturity dropped from 15.84 percent in January to 14.42 percent in August, while the 20-year bond yield declined from 15.27 percent in February to 14.5 percent in June.
This inverse movement, falling yields alongside rising prices, reflects what market watchers describe as a “flight to safety”, where investors channel liquidity into stable, long-term government instruments amid fewer high-yield alternatives.
“The demand is very high, and even in the stock market the same trend has been observed,. Demand is becoming larger than supply itself,” said Imani Muhingo, Senior Manager Brokerage and Advisory Services CRDB Bank Plc.
He attributes the imbalance to ample liquidity in the economy and limited alternative investment options, noting that the dynamic works to the government’s advantage.
“At the end, you see the BoT taking the same amount as what they offered, and it’s beneficial because high demand lowers the yield, allowing them to borrow at a lower cost,” Mr Muhingo said.
“The cost of debt for the government becomes smaller,” he added.
He added that rejected bids in oversubscribed auctions often return as tenders in subsequent sales, creating a reinvestment loop that sustains strong participation and continues to push yields down.
“This means the government can keep getting even better prices,” he said.
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