Speaker Orders Tcra, Cmsa to Explain Delays in Enforcing Share-Listing Rules

The Speaker of Tanzania's National Assembly, Mussa Azzan Zungu, has issued a directive for the Tanzania Communications Regulatory Authority (TCRA) and the Capital Markets and Securities Authority (CMSA) to account for significant delays in enforcing mandatory share-listing rules for telecommunication companies. This parliamentary intervention follows concerns raised by the Controller and Auditor General (CAG) regarding widespread non-compliance with Section 26 of the Electronic and Postal Communications Act (EPOCA), as amended by the Finance Act, 2016. The legislation requires non-state-owned telecom operators to float at least 25% of their shares on the Dar es Salaam Stock Exchange (DSE) to foster local ownership, enhance transparency, and boost government revenue. The Speaker's order underscores a critical lapse in regulatory oversight, with only one major operator having fully complied, leading to substantial potential revenue losses and hindering capital market development.

The legislative oversight in Tanzania has recently intensified, with the Speaker of the National Assembly, Mussa Azzan Zungu, demanding accountability from key regulatory bodies over persistent non-compliance with crucial share-listing requirements. The Tanzania Communications Regulatory Authority (TCRA) and the Capital Markets and Securities Authority (CMSA) have been summoned to appear before the Parliamentary Budget Committee to explain why most telecommunication companies have failed to list a portion of their shares on the Dar es Salaam Stock Exchange (DSE), years after the legal deadline expired. This directive highlights a significant regulatory enforcement gap with direct implications for government revenue, local economic empowerment, and the integrity of Tanzania's capital markets.

The legal mandate for telecommunication companies to list shares on the Dar es Salaam Stock Exchange (DSE) originates from the Electronic and Postal Communications Act (EPOCA) of 2010. This Act was significantly amended by the Finance Act, 2016, which introduced a mandatory requirement for non-state-owned network operators to offer at least 25% of their issued and paid-up share capital to the public through the DSE. The initial deadline for compliance was set for existing companies within three years of the Act's commencement, later extended, with the Finance Act, 2016, setting a new deadline of six months from July 1, 2016, effectively June 2018, for most operators. The primary objectives behind this legislative move were multifaceted: to enhance local ownership in the lucrative telecommunications sector, promote greater transparency and corporate governance, and ultimately facilitate increased government revenue through improved tax compliance and dividend streams.

The regulatory framework designates specific roles for the two summoned authorities. The Tanzania Communications Regulatory Authority (TCRA), established under the Tanzania Communications Regulatory Authority Act No. 12 of 2003, is the primary sector regulator, mandated to issue, renew, and cancel licenses, establish standards, and monitor performance within the electronic communications and postal sectors. Its functions include ensuring compliance with the EPOCA. The Capital Markets and Securities Authority (CMSA), established under the Capital Markets and Securities Act of 1994, is responsible for the development and regulation of Tanzania's capital markets, overseeing listing requirements, market intermediaries, and investor protection. Both bodies are therefore jointly responsible for the enforcement and oversight of the share-listing requirements.

Despite the clear legislative mandate and the stated objectives, compliance with the mandatory share-listing rule has been notably poor. Reports indicate that only Vodacom Tanzania PLC has fully complied with the requirement to list 25% of its shares on the DSE. Other major telecommunication operators, including Yas Tanzania (jointly owned by Axian Telecom and Rostam Aziz) and Halotel Tanzania (a subsidiary of Vietnam's Viettel Group), remain unlisted. While Airtel Tanzania has listed a portion of its shares, the government already holds a significant ownership stake in the company.

The reasons for this widespread non-compliance are complex. One significant factor highlighted is the failure of many companies to meet the stringent listing requirements stipulated under the Capital Markets and Securities Act and the Dar es Salaam Stock Exchange Rules. These requirements often include a profitable track record for at least two of the last three financial years, sufficient working capital, and a minimum paid-up capital, which some telecom firms have reportedly struggled to achieve. The CMSA has, in some instances, rejected listing applications due to non-compliance with these criteria.

Furthermore, a critical aspect of the Speaker's concern is the apparent lack of punitive action by the TCRA. While the EPOCA, as amended, empowers TCRA to take measures such as suspension or cancellation of licenses for material breaches of Section 26, such actions have largely not been taken against non-compliant companies. This regulatory inertia has allowed the non-compliance to persist for years beyond the stipulated deadline of June 2018. The issue gained renewed prominence following the latest report by the Controller and Auditor General (CAG), which explicitly flagged the non-compliance and its adverse impact on government revenue.

Interestingly, there have been recent discussions within the government to reconsider the mandatory listing rule itself. In February 2025, the Minister for Communications and Information Technology, Jerry Silaa, indicated plans to review the law, citing that the performance of already listed firms has been weaker than expected and suggesting a shift towards a more flexible, market-driven approach. However, the TCRA Director-General confirmed that the listing requirement remains in force. This potential policy shift, while aiming to address market challenges, also complicates the enforcement landscape. The Parliamentary Budget Committee, to which TCRA and CMSA are summoned, plays a crucial oversight role in reviewing the draft budget, monitoring government expenditure, and ensuring accountability in revenue generation, making it the appropriate forum for this inquiry.

The Speaker's directive to the TCRA and CMSA marks a critical juncture in the enforcement of Tanzania's share-listing requirements for telecommunication companies. It signals a heightened parliamentary resolve to ensure regulatory compliance and safeguard national economic interests, particularly concerning government revenue and local participation in strategic sectors. The forthcoming explanations from the regulatory bodies before the Parliamentary Budget Committee will be closely watched, as they could lead to more stringent enforcement actions, policy adjustments, or a clearer roadmap for achieving the objectives of the EPOCA amendments.

For legal practitioners, this development underscores the importance of advising clients in the telecommunications sector on the imperative of regulatory compliance, particularly regarding capital market obligations. It also highlights the need to monitor potential legislative reviews that could alter the current mandatory listing framework. The outcome of this parliamentary scrutiny will likely influence investor confidence, shape future regulatory approaches, and set a precedent for accountability in other regulated industries, making it a pivotal moment for corporate governance and capital market development in Tanzania.