Online Reporter
Martin Kadzere
Zimbabwe Stock Exchange chief executive Mr Justice Bgoni has urged Zimbabweans in the diaspora to re-evaluate the use of their remittances, encouraging a shift from consumption to investment.
In a recent article published in the Southern African Times, he argued that over US$1 billion sent home annually is a missed opportunity for both generational wealth creation and national development when it is primarily spent on things like groceries instead of being invested in the capital markets.
According to various sources, the number of Zimbabweans living in the diaspora is estimated to be in the millions, with some figures suggesting it could be as high as three to five million people.
Mr Bgoni, who also leads the Victoria Falls Stock Exchange,a US dollar-denominated bourse, highlighted that a shift in strategy could unlock vast potential. Redirecting even a modest 10 percent of annual remittances to capital markets would, he pointed out, inject over US$100 million in new liquidity each year.
The capital infusion would not only deepen the market but also pave the way for new listings, Initial Public Offerings (IPOs), and the development of new financial products like Exchange-Traded Funds (ETFs) and corporate bonds. Such growth would also position Zimbabwe to align with pan-African indices, increasing its visibility to global frontier market funds.
“The timing is critical,” he said.
“Zimbabwe’s exchanges have modernised, diaspora savings are significant, and the appetite for alternative investment vehicles is rising as remittance recipients confront inflationary pressures. The bridge between diaspora wealth and national development is already built in the form of the ZSE and VFEX. What remains is for the diaspora to cross it.”
For many years, the barriers that made it hard for Zimbabweans abroad to invest back home have been significantly reduced, Mr Bgoni says.
The ZSE modernised its system in 2015, installing an automated trading system and moving away from the old manual process.
This, along with tools like the View-Only Terminal, allows investors to track trades in real-time. The VFEX provides a clear and easy framework for investors. It handles settlements in US dollars and has a simplified process for repatriating funds.
Both exchanges have invested in digital solutions, making it easier than ever for diaspora investors to open accounts, fund them electronically, and trade through licensed brokers with minimal delays. Currently, brokerage portals offer live market prices, portfolio tracking, and performance dashboards, putting diaspora investors on the same level as those living in Zimbabwe.
“Consider the example of a Zimbabwean nurse in the United Kingdom or a teacher in South Africa.
“Instead of remitting the entirety of their income for immediate consumption, they could allocate a portion through a VFEX account into counters such as mining equities or consumer goods firms,” he says. “Over time, they benefit from dividend distributions in hard currency and long-term capital gains as companies expand balance sheets and earnings per share.”
Beyond personal gains, the shift from consumption to investments benefits the entire nation. Equity inflows from the diaspora provide listed companies with much-needed working capital and expansion finance.
This enables businesses to invest in new equipment, create jobs, and boost export production.
“This is the multiplier effect at its purest form: wealth creation for investors, productive capital for companies, and wider economic development for the nation. It also provides Zimbabwe with scarce foreign exchange inflows, strengthens the financial system, and broadens the shareholder base in line with global governance standards,” says Mr Bgoni.
The VFEX is demonstrating its strength as a US dollar-based stock exchange, setting a new record for year-to-date performance. Driven by robust gains in key counters, the VFEX has surged to a remarkable 25 percent year-to-date return, solidifying its position as one of the most rewarding bourses in the region.
The ZSE, despite its recent currency-related volatility, has historically been home to some of the largest companies in the region. For instance, Econet Wireless Zimbabwe reached a peak market capitalisation of US$3,2 billion in 2018, before settling at around US$785 million in early 2024.
Mining companies like Bindura Nickel Corporation and Caledonia Mining allow investors to gain exposure to global commodity markets. Meanwhile, financial institutions like CBZ Holdings provide a way to invest in the domestic credit market. These diverse options offer a range of risk-return profiles, making them suitable for diaspora investors with different investment goals.
