Investees | Tanzania | NMB
Our initial stake in NMB Bank PLC (“NMB”) was acquired from one of our shareholders in 2017. NMB is the most profitable bank in Tanzania.
Country Overview

Tanzania is one of the top growth performers in East Africa, with an average real GDP growth rate of 6% over the past five years. Growth slowed in 2020, due to COVID-19 resulting in a slowdown in economic activity and weakened business confidence. The economy showed signs of recovery after experiencing supply chain disruptions, covid related challenges, and climate-related constraints, evidenced by an improvement in economic indicators. The economy recorded an estimated GDP growth rate of 4.6% in 2022, marginally higher than the 4.3% growth in 2021. The government’s efforts combined with the Bank of Tanzania’s proactive implementation of accommodative policies yielded an improvement in the business environment.

The agriculture and services sectors remain the key sectors in Tanzania however, the government continues to prioritise the energy, mining, and tourism sector. The country is amongst the fastest growing economies in Africa, with a projected GDP growth rate of 5.2% for 2023. Tanzania’s resurgence both economically and politically has brought a sense of stability to the country.

Banking Sector Overview

The banking sector is regulated by the Bank of Tanzania with a total of 34 commercial banks. The Bank of Tanzania has been instrumental in ensuring the sector remains stable while managing credit risks and implementing corrective measures. In 2021, various policy measures aimed at promoting banking activities and lowering interest rates were introduced to bolster the sector. The overall banking sector is well-regulated and recorded its highest performance improvement in 2021. The sector is expected to remain on this growth trajectory supported by the business-friendly approach of the new President and regulatory measures undertaken by the central bank.

The banking sector in Tanzania is dominated by five large banks, which account for over 70% of profitability. Other banks are smaller and have lower market penetration. Tanzania’s fragmented banking sector is dominated by two large banks, NMB and CRDB. These two banks, hold a significant share of the sector’s net profit, asset base, loan book, and customer deposits. NMB is the most profitable bank in Tanzania, consistently ranking ahead of peers with an average ROE of 20% over the period 2018-2022.