THE slow pace in finalising the establishment of the Zimbabwe Investment and Development Agency (Zida) has emerged as a stumbling block to the launch of the much-anticipated Victoria Falls Stock Exchange (VFEX), businessdigest has established.
President Emmerson Mnangagwa signed the Zida Act on February 6, 2020, putting in motion an agency expected to attract, facilitate, promote, and protect investment. In establishing Zida, whose board is chaired by industrialist Busisa Moyo, the government said the agency was introduced as part of efforts to streamline investment laws and create a business-friendly environment attractive to both local and foreign investors.
However, Zimbabwe Stock Exchange (ZSE) head of business development, Anymore Taruvinga, told businessdigest yesterday the ZSE’s plans for the VFEX had been delayed by developments at Zida.
“We made an application to run the Victoria Falls Stock Exchange through the Zimbabwe Special Economic Zones Authority (Zimseza). As you know, Zimseza is now part of Zida and we are awaiting that authority to finalise our application.
“We got the licence to run that special bourse. We had anticipated running it under a special economic zone arrangement. There are specific requests that were made as part of the application process that would enable us to effectively run the bourse within the framework of a special economic zone. These (specific requests) are the ones that we are awaiting the green light on from Zida,” Taruvinga said.
Officials at Zida revealed this week the authority is still in the process of finalising its establishment. The authority, it is understood, would establish a one-stop investment services centre. The centre, in terms of the plan, would be controlled and supervised by Zida.
It will seek to bring together bodies departments involved in the process of registering a new business which include the Immigration Department, the Zimbabwe Revenue Authority, the Zimbabwe Tourism Authority, the Reserve Bank of Zimbabwe, the Environmental Management Agency, Companies Registry, the National Social Security Authority and Ministry of Mines and Ministry of Labour, among others.
According to Taruvinga, the VFEX proposal was a follow up to a pronouncement in Finance minister Mthuli Ncube’s 2019 fiscal review statement where he impressed on the need to establish an offshore financial services centre.
“Following the ministerial statement, as the ZSE, we were part of a team of experts who went all the way to Dubai, as well as Botswana, where we were to undertake studies on how their stock exchanges such as the one we desired for Victoria Falls were operating.
“We realised that the rules in place in those particular areas were different from those that are in place in mainland zones. Those stock exchanges operate very independently using a different set of rules of trading. In our case, it would effectively mean that in this particular zone, traders on the bourse would need to be allowed, among other things, to trade in foreign currency and there should be safeguards in place to promote trading,” Taruvinga said.
He added that the idea to allow traders to trade in foreign currency was a way to encourage investors to come through and invest in Zimbabwe given the challenging economic situation facing the country. Foreign direct investment plummeted from US$717 million in 2018 to US$259 million in 2019, according to the Reserve Bank of Zimbabwe.
“We have a high investment risk in the country. So the proposal is in such a way that you try and limit risk that foreign traders might be exposed to. There would also be need to put in place laws that would be favourable to the investors who come through to the bourse but, again, that is confined to that special economic zone alone,” Taruvinga said.