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Fast-growing company shapes future business

SPEAKING with groups of company Chief Executive Officers (CEOs), and hearing their stories and dreams, you believe that Tanzania’s future will be built by its hungry dreamers who view problems as opportunities.

Looking into the eyes of the young CEOs, you meet in the country’s commercial capital of Dar es Salaam or in other Tanzanian cities and towns, you see the future heroes of Tanzania.

Hitherto seen as a sleeping giant, Tanzania is now poised for radical change in a world experiencing a digital revolution, which has the potential to be not only the most transformative but also the most inclusive technological revolution we have ever seen.

Tanzanian companies cannot afford to lose the prevailing economic opportunities, which bring together businesses, governments and international institutions to showcase and promote the breadth and quality of investment opportunities across Africa.

Mobile technology and the internet have put access to countless products and services in the palm of every person’s hand. The digital revolution has the potential to drive tremendous—and inclusive—economic prosperity for Tanzania.

The country boasts of entrepreneurial and innovative talent, and industrialised nations are clearly interested in the natural resource-rich nation as a production base for the burgeoning East African and Southern Africa Development Community markets.

Most emerging Tanzanian public and private companies have a unique opportunity to help build and shape the future of business in the country.

One such local company is the TCCIA Investment PLC (TICL) established on November 9, 1999 after the country had embarked on the road to market-based economy, a public limited liability firm established under the sponsorship of, and proactively promoted by the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) in an effort to expand its financing sources.

TCCIA floated an internal Initial Public Offering (IPO) restricted only to the Chamber, its regional branches and its individual members. ExLAPF Pensions Fund also participated as a specially invited institutional investor.

The company’s Chief Executive Officer (CEO), Mr Peter Kifunguomali, says that the outcome of the restricted IPO was that the TCCIA and its affiliate offices upcountry together ended up owning 1.2 per cent of the company, meaning that the TCCIA does not really “own” TCCIA Investment PLC, or even “control” it.

However, thanks to its formation and the Chamber’s persistent efforts, the company was shortlisted by the government to participate in the privatisation of NMB as a member of the founder consortium, he says.

“Using as its seed-capital, the relatively meagre NMB shares it bought as the junior most member of the consortium, TCCIA Investment PLC has since grown its investment from Tsh 1.9 billion in 2005 to Tsh 29.46 billion in December 2019,” Mr Kifunguomali explains.

In addition, he says the company was mandated, and is regulated by the Capital Markets and Securities Authority (CMSA) to operate as a Collective Investment Scheme in the category of Closed-Ended Investment Company (CEIC).

This framework enables the company, subject to obtaining specific approval from the CMSA, to raise additional funds from the public by way of a Rights Issue or a Public Offer for the purpose of strengthening its capital base to finance new business and investment lines.

TCCIA Investment PLC officially started business operations in January 2005, operating as a collective investment vehicle through which the TCCIA members were able to pool their financial resources for the purpose of buying shares in public enterprises that were being privatized following the government’s decision to disengage in the ownership and management of business entities.

Mr Kifunguomali says to avoid co-mingling financial assets and physical assets, TCCIA Investment PLC decided to concentrate on investing in shares belonging to companies listed and actively traded on the Dar-es-Salaam Stock Exchange (DSE).

“This means that its net worth can be objectively determined at any point in time by just referring to the value of the underlying portfolio,” Mr Kifunguomali says. The total number of the company’s shareholders reached 3,432 by December 31, 2019, of which the Public Service Social Security Fund is the largest shareholder with 39 per cent of the stock.

The remaining shareholders are mostly individuals and a few companies operating small and medium businesses. The company launched public sale of its shares on the Dar es Salaam Stock Exchange in March 2018 and it is regulated and supervised by the Capital Markets and Securities Authority (CMSA).

Based on its Memorandum and Articles of Association (MEMARTS), TICL’s principal activities involve investing in business enterprises, industrial, financial services, telecommunication, agriculture, mining, construction, real estate, and the service sector.

“The mandate of the company,” says Mr Kifunguomali, “is reflected in its main functions as per company MEMARTS which is to mobilize and channel financial resources from its shareholders into viable investments. These investments, the TICL’s CEO explains, are divided into two major categories: Short-term and long-term investments.

Short-term investments include the interest earning bank deposits, government securities (Treasury Bills of various maturities), and microfinance/SACCOS.

Long-term investments include investment in corporate bonds listed and nonlisted companies, marketable securities traded at the DSE, government bonds of various maturities, investment in agriculture activities including agro-processing, investment in mining operations, investment in real estate development, investment in service industries, such as tourism, investment in transport services, and investment in enterprise growth markets.

According to Kifunguomali, the institutional set up of TICL consists of shareholders through the Annual General Meeting, the Board of Directors and the Management Team. The Board of Directors, expected to serve for three years, is supported by two committees–the first for investment and the second for audit and risk management.

As per company’s MEMARTS and the Companies Act 2002, the directors are elected by the shareholders during the Annual General Meeting.

“To be premier provider of investment management in Tanzania,” is our dream while “creating long term value to our shareholders by providing relatively superior returns guided by safe and sound investment,” says the TCCIA Investment Plc CEO.

To meet its objectives, the company plans to increase value of shares and company growth. Generally, the company targets to form subsidiary companies and diversify its portfolio from traditional investment avenues. Another objective is to improve the net worth of the TCCIA Investment Plc through enhancing resources mobilisation, increase investment income and improvement of internal processes.

For Tanzania to prosper, we need to support its existing business companies and inspire them on what they can do to transform society. The government must support such companies as TCCIA Investment Plc that drive inclusive growth and solve social problems.

THE first day I came into close proximity ...


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