The growing participation of local investors in Tanzania's capital market has sparked concerns about the need for stronger investor education and protection. According to data from the Dar es Salaam Stock Exchange (DSE), domestic investors accounted for 93.78% of the Sh803.8 billion worth of shares purchased during the third quarter of 2026. This significant shift towards local investment has been attributed to digital trading platforms, social media-based financial education, and easier access to investment information.
The DSE market data also reveals a notable difference in selling patterns, with foreign investors accounting for 33.56% of share disposals, equivalent to Sh269.73 billion, compared to 66.44% for domestic investors. The equity turnover during the third quarter increased from Sh248.64 billion recorded during the corresponding period in 2025. This growth in local investment has been welcomed by market participants, who see it as a positive development for the Tanzanian capital market.
Ahmed Nganya, chief executive officer of Vertex International Securities, has identified the growing participation of local investors as one of the notable changes in Tanzania's capital market in recent years. He attributes this shift to digitalisation, which has made it easier for Tanzanians, particularly younger investors, to access the market through mobile phones. Nganya believes that this growing domestic investor base could strengthen the market by reducing reliance on foreign capital.
However, Nganya also warns that the increased use of digital platforms has created new risks, particularly investment fraud. He notes that investors are being targeted through fake applications, unauthorised WhatsApp investment groups, fraudulent websites, and people impersonating licensed investment firms. Artificial intelligence has added another layer of risk, with fraudsters increasingly able to manipulate images and voices to impersonate individuals and financial institutions.
To mitigate these risks, Nganya urges investors to verify that investment companies and service providers are licensed by the Capital Markets and Securities Authority (CMSA). He also advises investors to be cautious about offers promising unusually high or guaranteed returns and to avoid making investment decisions under pressure. This advice echoes this year's World Investor Week campaign theme, "Invest for tomorrow, but protect today."
Other market participants, such as Fausta Daniel, company secretary of the Tanzania Stock Exchange Brokers Association (TSEBA), and John George, chief operating officer of Growthnest Tanzania Limited, also highlight the importance of financial education and investor protection. They note that social media has become an important source of investment information for young people, but that investors need to distinguish legitimate information from fraudulent offers.
The growth in local investment in Tanzania's capital market is expected to continue, driven by increasing demand for financial education and easier access to investment information. As the market continues to evolve, it is likely that investor protection will remain a key concern for regulators and market participants.
Key points
- Domestic investors now account for 93.78% of shares purchased on the Dar es Salaam Stock Exchange.
- Increased use of digital platforms has created new risks, particularly investment fraud.
- Market participants are calling for stronger investor education and protection.
