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Prosper Ndlovu in Victoria Falls
THE comprehensive economic reforms being championed under the Second Republic led by President Mnangagwa have started bearing fruit as witnessed by growing local and foreign investor confidence.

In another key economic milestone, President Mnangagwa yesterday officially opened the Victoria Falls Stock Exchange (VFEX) and presided over the first initial public offering to the stock exchange by the giant global investor, Caledonia Mining Corporation Plc, the parent company to Gwanda-based Blanket Mine, one of the top gold producers in the country.

An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance.

The listing of Caledonia onto VFEX marks the third listing on the new foreign currency-denominated exchange in just over a year.

It is also the first new listing in the Zimbabwean capital markets since 2016.

The development buttresses Government’s drive to transform Victoria Falls into an offshore financial hub, as well as a hub for tourism and financial services under the Special Economic Zones (SEZs) initiative.

The idea behind the initiative is to attract tourists while serving as a conduit for portfolio investments and foreign direct investments into the entire economy.

Guided by the “Zimbabwe is open for business” mantra and the drive to achieve an upper middle-income economy by 2030, President Mnangagwa expressed excitement over the positive responses by local and foreign investors towards driving economic transformation in the country.

“This is indeed a sure sign of the confidence that investors are placing in the policies of the Second Republic, especially considering that Caledonia is also listed on the United States of America’s New York Stock Exchange and United Kingdom,” said the President in his keynote address.

“It was under the Second Republic that this initiative was remoulded and implemented.

“The Victoria Falls Stock Exchange is expected to drive domestic and international investments, which are a key requirement for the attainment of our vision of a prosperous and empowered upper middle-income economy by 2030.”

To buttress the drive, Government has already outlined a basket of incentives aimed at stimulating new listings, including the recent increase in  export retention for issuers that chose to list on the VFEX.

The incremental export incentive scheme put in place through the Reserve Bank of Zimbabwe, seeks to boost production and productivity while accelerating sustainable growth of export revenue and encouraging listing and participation of firms on the VFEX.

President Mnangagwa, who earlier toured the VFEX premises in the tourism town’s small CBD, said the commencement of the new stock exchange also demonstrates Government’s commitment to the devolution and decentralisation agenda.

He stated that the offshore financial services centre status would catapult the City of Victoria Falls beyond being a tourist hub to an internationally recognisable emerging offshore financial hub.

“It is my expectation that VFEX will stand shoulder to shoulder with the world’s best in providing a window of investment, not just into Zimbabwe, but into the rest of Africa,” said President Mnangagwa.

“This also includes offering an opportunity to our pension funds to invest in foreign currency denominated securities, that way enhancing their ability to diversify currency risk and continue to grow sustainable value for the pensioners whose assets they manage.”

As such, the President said his Government was committed to promoting growth of VFEX into an integral part of the global financial architecture.

He applauded the recent signing of the memorandum of understanding (MoU) between VFEX and the Dubai Gold and Commodities Exchange towards establishment of a joint commodities exchange.

The benefits from this venture are expected to enhance price transparency for Zimbabwean precious minerals and better value retention for small-scale miners, said President Mnangagwa.

“This is against the backdrop of continued illegal sanctions that have hampered out access to markets for the minerals produced in our great country.

“It will further spur ongoing efforts towards attainment of the US$12 billion mining industry by 2023,” he said.

The President also said that having Caledonia publicly listed on VFEX provides a good opportunity for locals 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 required capital for operations, while local citizens are concurrently empowered,” he said.

President Mnangagwa encouraged unlisted corporates in the mining, manufacturing, agriculture, tourism and other key sector to also consider listing on the VFEX and other capital markets.

He urged small to medium enterprises (SMEs), in particular, to grab the opportunity to list on the various stock exchanges in their numbers saying “this is the surest way” to raise long term capital for business growth.

The President assured all businesses in Zimbabwe and potential investors that his Government would continue to put in place nevessey frameworks and mechanisms to further consolidate investor confidence and deepen the country’s financial markets.

He said an advisory committee that comprise industry players has been created to ensure the Government remains in sync with the perspectives and the needs of business and productive sectors.

“We not only hear, but we also implement supportive policies, including recent focus on infrastructure and other critical enablers to accelerate business growth for win-win outcomes,” said the President.

In his remarks Finance and Economic Development Minister, Professor Mthuli Ncube, said the Government incentive scheme has come in handy in luring the three counters into VFEX.

As part of measures to revitalise domestic industrial value chains, the minister said capital markets were critical in complementing policy initiatives.

He pledged the Treasury’s commitment to continue improving doing business environment saying the future was bright for Zimbabwe.

Matabeleland North Provincial Affairs and Devolution Minister, Richard Moyo said the VFEX opening and Caledonia listing was a milestone development for the province.

Finance secretary Mr George Guvamatanga said Zimbabwe was a safe and profitable investment destination.

Senior Government officials who included Cabinet ministers; Owen Ncube (state security), Chief Secretary to President and Cabinet Dr Misheck Sibanda and his deputy, George Charamba, senior directors, Parliamentary Committee on Budget and Finance members, capital markets leaders and business executives also attended the event.