The National Treasury and Bank of Tanzania should engage with TZUK Diaspora Council – Chamber of Commerce and Investment department in structuring and issuing Diaspora bonds which can be very useful in the financing of emerging and developing economy of the country, looking at the success India had with issuing the India Development
Tanzania, as one of the developing countries rely heavily on remittances and foreign direct investment as sources of funding. The World Bank Migration and Development Brief reports remittances from 232 million international migrants are expected to reach $516 billion in 2016. Increasingly large amounts of remittances help friends and families in times of need as well helping non-residents acquire assets back home. For these developing countries, access to international markets and foreign debt markets isn’t always a given, developing countries depend on aid for disaster relief and infrastructure building, among many other reasons.
However, due to little credibility, an inability to back assets, and/or political instability, developing countries can’t always obtain the capital required to proceed with vital projects. A major aspect of diaspora bonds is a country’s ability to raise low-cost capital through patriotism, expatriates can overlook many shortcomings of the financial stability of Tanzania because of government commitment and desire for development of its people, when they’re helping their home country’s economic growth, these bonds are typically offered to expatriates with long-term maturities and average yields, provided that expatriates hold some patriotism and knowledge of our motherland, they’ll be willing to accept a below-average investment compared to a low-risk foreign treasury bond.
The treasury in collaboration with TZ Diasporas abroad should establish a scheme whereby Diasporas holding SS or DC are becoming taxpayers or a sort of fees payable to the government for development. (Eg.$50 per year) This would be a fixed amount that will be regulated with index of inflation at a desired period.