The Role of Stock Exchange to the Economic Growth in Tanzania

The study was designed to identify the role of Stock Exchange market to economic growth in Tanzania. It also a determined the factors which hinder the swift growth of Dar es Salaam Stock Exchange Market and the suggested measures to be taken by DSE to promote economic development in Tanzania. The study used the case study based on triangulation and descriptive design to obtain necessary and required qualitative and quantitative data. The intended population of this study was groups of stackholders of DSE from four categories namely representative of regulatory bodies, representative of corporate organization, stock brokers and analyst and shareholders and investors. The target sample size was 100 stakeholders from four categories of DSE.The data for the study were obtained through both primary and secondary data collection method in the former interview, observation and questionnaire were used while various published and non-published materials were used in the later. Data collection was analyzed with assistant of the statistical packaged for social science (SPSS): The findings have revealed that both market capitalization and value of share traded contribute a small amount in growth of the economy of Tanzania. Furthermore, the findings have revealed the challenges which hinder the growth of DSE, as lack of liquidity, low market capitalization, poor macro-economic high transaction costs, lack of adequate track – openness, lack of skillfully human resources, and lack of public awareness of DSE. Based on the major findings, recommendation to improve the role of DSE, in order to promote economic growth in Tanzania, were to improve automated system, promote institutional investors, strengthen education, public awareness and access information of DSE and suggesting the government to stabilize macro-economic