admin
Business Writers
The Victoria Falls Stock Exchange (VFEX) has occupied its new home ahead of opening in the resort town on Friday as the country angles to attract Foreign Direct Investment.
Denominated in foreign currency, the VFEX will be a rare opportunity for the country’s prime resort town to diversify as Government plans to create an offshore financial services where visitors will combine tourism and business in Victoria Falls.
The VFEX, a wholly-owned subsidiary of Zimbabwe Stock Exchange (ZSE), has occupied an office space vacated by Power Sales in the town centre and is targeting foreign investors as well as global capital markets especially the mining and tourism industries.
The Government is already in talks with several international investment banks to support the VFEX while a number of companies have expressed interest listing with the new market.
In an interview with local radio station Breeze FM, ZSE chief executive officer Justin Bgoni challenged the tourism industry to see value in the new stock market.
“We are doing this for the development of the country. We know that for the country to do well it needs foreign investment and this is platform that we hope will bring foreign investors to the country. There is less risk because it’s in United States dollars while it will be easy and cheaper to move money in and out.
“Government has committed that the VFEX will remain a foreign exchange market because this is very important in line with Vision 2030, which requires a lot of investment most of which has to come from outside the country. They (Government) need a vehicle that will make it attractive to foreign investors to come into the country hence the VFEX and tax benefits that it has come with. We will not achieve vision 2030 without foreign investment and the Government knows this,” said Bgoni.
The country generates slightly above US$4 billion foreign currency per month, which is shared among various economic expenses hence more foreign currency is needed through the VFEX
Bgoni reiterated that it will be easy for foreigners to invest in the VFEX as he urged local tourism and hospitality industry to list.
“We are very close to opening now. We are busy equipping the office and that’s a sign we are coming soon. We want the community to be involved in the exchange, which is why we are opening the office near them. As for the tourism industry, we are hoping they will get the vision. When stock exchange comes into town it brings other businesses,” he said.
Bgoni said the VFEX brings high value jobs and prestige to Victoria Falls while listing on the stock exchange has vast advantages for business.
“Companies that list on the stock exchange have more accountability because of corporate governance rules to be followed, which is why people invest in listed companies. The VFEX will also expand Victoria Falls economy by bringing brokers to the resort town. There will now be an offshore market as an alternative industry and tourists will now mix tourism and financial services and stay longer,” highlighted Bgoni.
He said taxes on the VFEX tax will be lower compared to the ZSE, with capital gains tax totally removed.
Listed businesses will pay only five percent when a company declares dividends as compared to 10 percent paid on the ZSE.
Moving money into and out of VFEX will also be easier for foreign companies. Bgoni said the VFEX will become independent after two years as it has potential to grow into a big stock exchange.
He said expectations are high for many companies operating in Zimbabwe but listed elsewhere to invest on the VFEX.
Bgoni said ZSE will vigorously raise awareness about VFEX to attract more listings.
Bongani Ndlovu