Bidding for government securities in Tanzania has gone online courtesy of a new system launched by the Bank of Tanzania (BoT).
The new online system for bidding government securities has both an online bidding and central depository services (CDS) account. Government securities include bonds, notes, and other debt instruments sold by any government to finance its budget or borrowings. Most of them are long term and with high profits to the traders.
“The bank had to improve the old GSS so that it conforms to international best practices, keeping pace with technological advancement,” BoT Governor Prof Benno Ndulu said, as quoted by AllAfrica.
Prof Ndulu added that the banks old system was not efficient and was not interactive forced traders to visit the banks physical premises.
The new online system, according to BoT, will accept bidders applications wherever they are in the world and will also be open to East Africa traders first then to the whole world by 2015.
According to Tanzania’s Daily News among the bidders allowed will be stockbrokers, banks, pension funds and their proposals will be private to them alone as they processed online.
BoT director of financial market Judith Ndissi added that the old system was technologically behind even though the bank used it for thirteen years.
Edward Makwaia, BoT’s director of management information system, claimed the software will save the bank millions.
“The software can cost up to one million US dollars plus servicing fees of over 100,000 US dollar yearly,” he said.
The software is expected to increase efficiency and transparency in the country’s the government bidding but now much is already expected.
Moremi Marwa, the Tanzania Securities chief executive officer, commented that it was high time the central bank combined BoT’s CDSs and the Dar Stock Exchange.