Victoria Falls Stock Exchange Boosts Strong Financial System: Mthuli Ncube

The Chronicle

Oliver Kazunga recently in Victoria Falls
The establishment of the Victoria Falls Stock Exchange (VFEX) has given a boost to building strong financial systems in Zimbabwe, which is essential as the country moves towards achieving an upper middle income economy. by 2030.

Finance and Economic Development Minister Professor Mthuli Ncube said this on Friday as he officiated at Bindura Nickel Corporation’s (BNC) listing ceremony on the US dollar-denominated stock exchange in Victoria Falls.

BNC becomes the fourth entity to appear on the VFEX since the platform’s operationalization last October.

The main seed producer, SeedCo International Limited, was the first company to be listed on the VFEX in October 2020, while Caledonia Mining Corporation, which owns Blanket Gold Mine in Gwanda, and Padenga Holdings, a processor of meat and skins from crocodile interested in gold mining, have joined this year.

VFEX seeks to provide a global platform for hard currency equity trading in order to promote foreign investment in Zimbabwe and throughout the Sadc region.

The exchange is also one of the many initiatives implemented by the Second Republic to stabilize the economy and attract foreign direct investment.

“As a country aspiring to achieve upper middle-income country status by 2030, we need strong financial systems capable of leveraging domestic and foreign capital investment in productive sectors of our economy,” said the professor Ncube.

He said signing the MoU between VFEX and the Dubai Gold and Commodities Exchange (DGCX) in October would go a long way in facilitating cooperation and knowledge exchange on commodity trading on a bourse.

“Our financial markets must embrace commodity trading… a transparent commodity market will help our producers achieve market-determined prices for their output,” Prof. Ncube said.

“We hope that VFEX will continue this initiative with the ultimate goal of establishing a local exchange for hard raw materials (natural resources that are extracted).”

The Minister said that the development of healthy financial markets is essential for the economy and the establishment of sustainable business models.

He noted that a number of unlisted companies have folded in the past due to key man risk (when the founder becomes incapacitated or dies, leaving no one confident enough to keep the business going) and, by therefore, these risks are minimized on the exchange by the separation of management and ownership.

Against this background, Prof Ncube said it was high time that entrepreneurs moved from a model of total control to one that promotes the growth of the business and the economy as a whole.

“As we celebrate BNC’s listing on VFEX today, we must remember that the mining sector remains essential for our country in terms of generating foreign currency and creating jobs,” he said. .

“This is why in 2019, President Emmerson Mnangagwa launched the mining industry to $ 12 billion by 2023. We therefore hope that BNC will continue to make full use of the capital raising opportunities on VFEX in order to increase the production.”

Guided by the five-year economic plan, National Development Strategy 1 (NDS1), which runs from 2021 to 2025, Prof Ncube said all stakeholders have a role to play in Zimbabwe’s success.

“As the government will continue to work to promote a favorable business environment, this should be complemented by increased productivity and investment. Let’s avoid corruption, rent-seeking behaviors that will fuel inflation and monetary instability, ”said Professor Ncube.

As part of NDS1, the government is targeting single-digit inflation and stable currency.

According to Zimstat, Zimbabwe’s year-on-year inflation rate, the year-on-year inflation rate for the month of November 2021, as measured by the All-items Consumer Price Index, was 58 , 4%.

The government has revised upward the year-end inflation target to between 52 and 58 percent, citing recent inflationary pressures.

Earlier this year, Professor Ncube predicted that inflation would end the year between 25% and 35% after the inflation rate fell sharply this year to a two-year low of 50.2% in August.

The projection of the 25 to 35 percent range was a revised target of the authorities’ initial forecast in the year inflation would fall below 10 percent by December of this year.

The minister expressed concern that the economy is facing a new wave of the Covid-19 pandemic that threatens to derail tourism and the economy as a whole.

“We encourage those who are not vaccinated to get vaccinated. The government has purchased enough vaccines to cover all Zimbabweans who wish to be vaccinated, ”he said.

In her remarks, VFEX President Ms. Caroline Sandura said listing with BNC was a remarkable achievement for the stock exchange and the capital markets in general.

“For those wondering why there was such a great hike at VFEX this year. Let me remind you of the benefits and incentives for entities listed on VFEX, which include, but are not limited to the following: the ability to raise capital in hard currency; incremental retention of exports; Global branding and VFEX will ultimately sit in the offshore financial services hub, which will have a significant visibility effect and lower transaction costs for investors, ”she said.

Ms. Sandura said VFEX will play its role in facilitating the raising of capital and providing an active secondary market for BNC shareholders. Meanwhile, BNC has indicated that it has an ambitious investment program that it intends to finance using VFEX resources.

This includes the $ 200 million Hunters Road project, which has been in pre-development for more than 10 years, as well as the deepening of the Trojan mine shaft and the removal of the Shangani mine from care and [email protected]


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Don F. Davis