Zimbabwe targets mining for VFEX

HARARE - Zimbabwe will be aiming to attract global capital mostly from the mining sector when the Victoria Falls Stock Exchange comes into operation this week, Finance and Economic Development Minister Professor Mthuli Ncube said.

Minister Ncube revealed this while presenting the pre-budget strategy paper, themed “Building Resilience and Post Covid-19 Recovery in Harare ahead of the 2021 National Budget expected to be delivered sometime next month.

VFEX, to be operated by Zimbabwe Stock Exchange, will allow listed companies to raise and trade their stock in any convertible hard currency, limiting the exchange risk.

According to Prof Ncube there is a need for the creation of globally recognised stock exchanges in Africa, those that arise from environments that are devoid of any negative impact of exchange rate fluctuations. He said the VFEX will be a Pan African bourse.

“In terms of the impact and the effects of the Victoria Falls Stock Exchange; why did we create it? We thought as a Government, there is no pan-African exchange that has global clout that is able to preserve values of companies in a globally recognisable and consistent way.

“So, we thought; let us create this platform (VFEX. So the Victoria Stock is a Zimbabwean stock exchange, but the vision is much bigger. We want a pan-African stock exchange for companies to raise capital through that stock exchange. “They do not have to raise the capital in Zimbabwe, but from Australia and so forth, but the listing and quotation is on the Victoria Falls Stock Exchange, it is a global platform based in Africa for raising capital.

“And we are targeting the mining sector. That is a typical hard currency sector, they need mining equipment, which is bought in hard currency, even the insurance has to be in hard currency,” the minister said.

The Treasury chief said they were targeting mining, because it is where most of Africa’s endowment is based and with the sector drawing most of its revenue in hard currency, it made sense to establish an exchange such as the VFEX in Zimbabwe.

He said Zimbabwe, for instance, was endowed with more than 40 mineral occurrences, although less than 10 percent of the resources are currently being commercially exploited at the moment.

Notably, the minister said southern Africa alone had significant mineral reserves, which the VFEX will be targeting, but he noted that Zimbabwe will have to compete with South Africa, which has another major African global exchange in Johannesburg Stock Exchange (JSE). – THE HERALD, Zimbabwe.