Vic Falls leads Zim shift to diversified capital markets

THE Victoria Falls International Financial Centre (VFIFC) is driving Zimbabwe’s shift towards a more diverse capital markets system, placing the country on a path similar to some of Africa’s most advanced financial centres, ZSE Holdings Group chief executive officer Mr Justin Bgoni has said.

Speaking at the recent Zimbabwe Association of Pension Funds (ZAPF) conference held in Victoria Falls, Mr Bgoni said Zimbabwe is moving away from relying on a single, equities-based market structure that has for years defined the local financial landscape.

A diversified capital markets system offers a wider range of investment options. These include Exchange Traded Funds (ETFs), Real Estate Investment Trusts (REITs), commodity-linked products and the US dollar-denominated Victoria Falls Stock Exchange (VFEX). Such options provide investors with more ways to grow and protect their investments.

Before these changes, pension funds had limited choices and often struggled to protect their value against inflation and currency fluctuations.

Mr Bgoni said the VFIFC is playing a broader role than just supporting stock market activity, positioning Zimbabwe as a regional hub for financial services.

“VFIFC positions Zimbabwe as a regional offshore financial gateway opening new structures for institutional capital,” he said.

He said that the VFIFC now supports a wide range of financial services beyond traditional stock trading.

“These include Financial Services Company Registrations, Capital Markets, Insurance, Fintech, Banking, and Payment Systems. In addition, market activities such as stockbroking, sponsors, lawyers, custody services, collective investment schemes (CIS), investment advisory, credit rating and crowdfunding platforms, and CSDs are all part of the new ecosystem,” he said.

Mr Bgoni said the transformation reflects a deliberate move to modernise Zimbabwe’s financial markets.

“The exchange has evolved from a traditional equities market into a diversified capital markets ecosystem,” said Mr Bgoni.

He added that the VFIFC offers several opportunities for pension funds, including access to international markets, US dollar investments, alternative assets and greater participation by foreign investors.

“VFEX delivers genuine US dollar-denominated capital growth – a structural diversification tool for pension portfolios,” he said.

Mr Bgoni pointed to measurable progress, noting that the VFEX All Share Index has grown from a base of 100 in 2020 to 228,92. This represents cumulative growth of 129 percent in US dollar terms.

He also highlighted the role of commodity-linked investments, such as the gold-backed ETF on the VFEX. This product allows investors to gain exposure to gold in US dollar terms, providing a hedge against inflation and currency instability through a listed and tradable platform suitable for pension funds.

To put Zimbabwe’s progress into perspective, Mr Bgoni compared the country’s developments with other African markets. In South Africa, the Government Employees Pension Fund allocates about 50 percent of its assets to equities. In Nigeria, pension fund administrators have invested around N4 trillion in equities, with the country’s pension index rising by 59,7 percent in 2025.

In Kenya, pension assets have grown significantly, quadrupling over the past 12 years to reach KSh2.25 trillion, while Botswana has expanded its market by introducing ETFs alongside traditional equities. Mauritius, once primarily a sugarcane-based economy, has grown into Africa’s leading International Financial Centre and is now ranked 52nd globally.

Mr Bgoni said Zimbabwe is following a similar path and must continue to focus on expanding and strengthening its capital markets.

“Zimbabwe is heading towards that trajectory. The future of pension fund investing in Zimbabwe lies in diversification, innovation and long-term participation in capital markets,” he said.

He emphasised that strong capital markets remain essential for both pension fund growth and broader national development.

Mr Bgoni said capital markets remain the cornerstone for pension funds, as they help deliver value to members while also supporting economic growth.