Can the Victoria Falls Securities Exchange Work?

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Believe it or not, the Zimbabwean government has never been short on good ideas. They come up with them all the time when it suits them. Opening a foreign currency-denominated exchange in the resort town of Victoria Falls is one of those good ideas that actually has a chance of succeeding.

Dubbed the VFEX (from its proposed name Victoria Falls Securities Exchange) the exchange will operate under the umbrella of Special Economic Zones (SEZ) initiative. You see tourists are already allowed to freely use foreign currency in this town. And while they are sight-seeing they are introduced to the idea of investing in Zimbabwe. In a town far removed from the political chaos in Harare some investors might actually be tempted.

“As a global securities exchange, VFEX will seek partnerships with other global exchanges and partners around the world, and become a truly global platform. Foreign Global companies invested in Zimbabwe can now seek a listing on VFEX. Enquiries at ZSE.” Mthuli Ncube on Twitter

In fact, the Government is keen to make sure everyone understands that the exchange is not only geographically removed from Harare but that the normal rules (if you can call the government’s flip-flop regulations that) do not apply to this exchange although it is still under the management of the Zimbabwe Stock Exchange:

“If we are to operate in a special economic zone there are chances of getting tax concessions both for the stock exchange and the issuers.
It’s also treated as a separate country, so you have more flexibility in terms of movement of money in and out of the country.
If you think of other countries, it’s normally good to link an offshore financial services centre with your tourism.”
ZSE CEO  Justin Bgoni

The Zimbabwean government seems to be seeking to create a little Hong Kong in Victoria Falls. A neutral ground where stability is the order of the day as opposed to the murky waters of Harare where drastic policies are announced in the morning and reversed in the evening. Far-reaching orders such as the new regulations governing fungibility of shares are announced on a whim and with little consultation.

It’s all about execution

Again to repeat our opening words, the Zimbabwean government has never been short on good ideas and this falls in the great category. However, it’s all about execution. Having a good recipe to follow does not necessarily guarantee that one will be a good cook, nor does it guarantee that one will get a good meal.

Details are still scant on how the capital raised there will be banked and used. Will funds raised through this exchange be treated as “free funds”? What happens when you use the capital to produce goods and services locally, will you be allowed to sell in forex only? If not when will you get the foreign currency to repatriate back to investors? The government has already given their word that investors will be able to repatriate funds but given the current economic situation and past decrees such as those on fungibility, there isn’t exactly much stock in those words.

In fact, in my opinion, the meal has been scarcely made and already there is a little fly in the ointment. Having the ZSE manage this exchange is a terrible idea. As a show of good faith, the exchange must be independently managed by experts something along the lines of the Reserve Bank of South Africa. Perhaps the government and businesses should select a committee that manages the organisation. A group of people far from the maddening crowd that dominates policy in Harare-driven by technical guidance, not political games.

Again VFEX is a good idea whose success lies in how they end up doing it. Whether it succeeds or fails depends on how well they want to do it or rather how well they are willing to let others do it for them.

About The Author

Garikai Dzoma is an editor at

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Real-time gross settlement systems (RTGS) is a funds transfer system where money transfer takes place from one bank to another on a “real time” basis and “gross” basis. Settlement in the “real time” means that the transaction happens almost immediately.


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The symbol ZAR is the currency abbreviation for the South African rand.