The Second Republic administration has reaffirmed its commitment in making the Victoria Falls Stock Exchange (VFEX) a vital component of the global financial architecture.
Addressing experts at the official opening of the VFEX and listing of Caledonia Mining Corporation Plc in Victoria Falls today, President Eemmerson Mnangagwa said the move demonstrates government’s commitment towards devolution.
“…the Offshore Financial Service Centre catapults Victoria Falls City from being just a tourist hub to an internationally recognisable offshore financial hub,” he said.
The VFEX commenced operations in October 2020 marked, and it is set to become an Offshore Financial Services Centre in this majestic city of Victoria Falls.
As part of the efforts to further develop the financial services sector, through provision of opportunities for global investment, Minister of Finance and Economic Development tabled this initiative in the 2019 National Budget, highlighting the Government’s intention to set up an Offshore Financial Services Centre (OFSC).
“In 2019, a benchmarking exercise was undertaken to learn how other jurisdictions operate their Offshore Financial Services Centres, focusing on the rules regulations that govern such centres, as well as the financial architecture comprising products tradable and the main players and participants.
“Officials from the Ministry of Finance and Economic Development, Reserve Bank of Zimbabwe, Securities and Exchange Commission of Zimbabwe, Zimbabwe Stock Exchange and Deposit Protection Corporation visited Botswana and Dubai on two separate occasions to learn about their Offshore Financial Services Centres,” President Mnangagwa said.
He highlighted that the concept of offshore financial centres is also common in other countries. Globally, such centres are found in Ireland, the Caribbean, Luxembourg, Singapore, Hong Kong and the Netherlands, and in Africa, Mauritius stands out as an offshore financial hub.
“The common theme in all these jurisdictions is that they provide an environment that can attract large amounts of both domestic and international investment,” he said.
He added: “We are in pursuit of vision 2030, which is achieving an upper middle income economy. Attainment of this vision requires significant investment. Having the Victoria Falls Stock Exchange in an Offshore Financial Services Centre within our own country is expected to drive such investments. We are committed as Government, to make VFEX an integral part of the global financial architecture. VFEX is also expected to offer our pension funds an opportunity to invest in foreign currency denominated securities, enhancing the ability of our pension funds to diversify currency risk and therefore grow sustainable value for the Pensioners whose assets they manage.”
Against this background, he cited that the VFEX is also a window of investment in Zimbabwe, but into the rest of Africa.
“We want to see an internationally competitive Stock Exchange, that will stand shoulder to shoulder with the world’s best in class,” he remarked.
The listing by Caledonia on the VFEX today marks the third listing on the new exchange within the space of just over a year. Caledonia listing also marks the first Initial Public Offering on the VFEX and the first new listing in the Zimbabwean capital markets since 2016.
“As a nation we pride ourselves in the belief that our citizens should also benefit from the exploitation of our natural resources. Thus, having Caledonia publicly listed on the Victoria Falls Stock Exchange provides opportunities for our citizens to participate as investors either directly as individuals or indirectly through their fund managers and pension funds.
“This creates a win-win situation as the listing entity can raise the capital required for its operations as local citizens are empowered. Let me therefore take the opportunity to encourage other unlisted corporates in the mining, manufacturing, agriculture, tourism and other sectors of our economy to also consider listing, if not on VFEX here, they can list on the Zimbabwe Stock Exchange and the FinSec for alternative listings.
“I particularly want to encourage our SMEs in their multitudes, to consider listing on these various stock exchanges that are in the country as this is the surest way to raise long term capital for growth,” he added
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