Mnangagwa says the economy is on recovery




Emmerson Mnangagwa

HARARE – Comprehensive economic reforms in Zimbabwe have started bearing fruit as witnessed by growing local and foreign investor confidence, President Mnangagwa said yesterday when he officially opened the Victoria Falls Stock Exchange (VFEX).

The event saw the first initial public offering on the foreign currency-denominated stock exchange by 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 refers to the process of offering shares of a private corporation to the public in a new stock issue. 

Caledonia is 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 and the listing offers an opportunity to Zimbabweans with access to foreign currency to share in the ownership of Caledonia as well as foreign investors.

The development buttresses the 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 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” policy and the drive to achieve an upper-middle-income economy by 2030, President Mnangagwa expressed excitement over the positive response 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 government, especially considering that Caledonia is also listed on the New York Stock Exchange and in the United Kingdom, said the President in his keynote address. 

It was under Mnangagwa’s government 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. 

The 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. 

According to the State media, Mnangagwa, who earlier toured the VFEX premises in the small city centre, said the commencement of the new stock exchange demonstrated Government’s commitment to the devolution and decentralisation agenda.

Having the status of an offshore financial services centre would catapult the City of Victoria Falls from being a tourist hub to an internationally recognised 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 the growth of VFEX into an integral part of the global financial architecture.

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

The benefits from this venture would 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 the 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 Zimbabweans 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 sectors to also consider listing on the VFEX and other capital markets.

He urged small to medium enterprises in particular to grab the opportunity to list on the national 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 frameworks and mechanisms to further consolidate investor confidence and deepen the country’s financial markets.

He said an advisory committee that comprises 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 our 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 the 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.