Experts endorse Vic Falls bourse as game-changer

Enacy Mapakame
International capital markets experts have endorsed the soon coming Victoria Falls Exchange (VFEX), describing it as a game-changer with potential to put Zimbabwe in the spotlight.

The VFEX is expected to boost foreign investments into the country as the exchange will trade in hard currency and therefore shield investors from any foreign exchange risks.

UK-based mining expert and Contango Holdings PLC director Mr Roy Pitchford told potential mining investors and businesses that foreign investors wanted a platform that guaranteed return on investments and enabled them to move their hard currency hassle-free, something that the VFEX promised to offer.

However, its success would also be hinged on implementation, he said.

“The VFEX has huge potential to become a game -changer in Zimbabwe, but implementation matters. Foreign investors want to have an experience they have say on London Stock Exchange. They want to know that if they invest money on the exchange, they can freely move it when they want to and to any destination.

“There are mining companies like Caledonia that are operating successfully in Zimbabwe and this can be a good platform for them to list,” Mr Pitchford told stakeholders in the mining industry from across the globe during the fourth annual Arab African Mining Conference and Exhibition held virtually due Covid-19 induced restrictions.

The conference was hosted by Financial Markets Indaba (FMI) to bring stakeholders in the mining sector in Africa and the Arab region as part of initiatives to showcase investment opportunities in these regions.

FMI business development executive Patrick Muzondo said focus was on marketing greenfield and brownfield mining projects in these two regions with participation drawn from Government ministers, experts in geological surveys, capital markets, chief executive officers and decision makers operating in the mining sector.

This year’s conference had a special interactive session on Zimbabwe, focusing on the VFEX as a tool to enhance investment in the country’s mining sector.

Discussants agreed Zimbabwe is endowed with rich mineral resources that can help in economic development and operators can take advantage of the VFEX to raise capital.

Zimbabwe is targeting a US$12 billion revenue mining sector by 2023 and the VFEX is seen as a crucial enabler if properly implemented.

“Zimbabwe has rich mineral resources and so do other African countries and this VFEX is a good initiative.

“If the environment is not conducive, investors will just move to the next country,” said Mr Ndavhe Mareda, chairman of South African diversified mining company, Makole Group.

Khanda Capital chief executive officer Mr Prejelin Naggan concurred saying trading in hard currency increased VFEX’s allure although a simple set of rules was needed to attract investors and restore their confidence in the country’s capital markets.

Zimbabwe Stock Exchange (ZSE) chief executive Mr Justin Bgoni said the country was committed to the success of the VFEX with strong support coming from Government through Treasury and the Reserve Bank of Zimbabwe (RBZ).

He said investor friendly rules had been put in place to match international standards and other top regional exchanges like the JSE.

“This project is very important for Government and we have received tremendous support from Ministry of Finance and RBZ which shows how serious they are about this.

“Among other advantages, the VFEX takes away exchange rate risk since it will use hard currency which will make it very attractive among other African exchanges,” he said.

Mining firms and other export oriented companies are expected to list on the exchange.