The future offshore financial centre should offer investors tax incentives and guarantees for the repatriation of funds. Land will also be offered to banks to encourage them to set up their offices in the country.
Zimbabwe plans to set up an offshore financial centre in the seaside resort of Victoria Falls, like those of Dubai and the Isle of Man to attract foreign investment, Bloomberg reported on Monday, February 20, quoting the Zimbabwean Minister of Finance, Mthuli Ncube (photo).
“The trigger is the success of the Victoria Falls Stock Exchange Limited (VFEX),” said Mr. Ncube, referring to the Victoria Falls Stock Exchange where transactions are denominated in U.S. dollars.
We want to compete with any offshore financial centre in the world. The project will provide investors with an environment comparable to that of the Isle of Man, Mauritius and Dubai,” he added.
The Minister also indicated that the Victoria Falls Financial Centre will provide investors with tax incentives and guarantees for the repatriation of funds, while indicating that land will be made available to international banks to encourage them to set up offices in the country.
The Zimbabwean government has already appointed Marc Holtzman, an experienced American banker with 35 years of experience in emerging markets, to head the board of directors of the future centre.
Mr. Holtzman, who also chairs the board of directors of CBZ Holdings, the country’s largest banking group, will have a hard time. Especially since Zimbabwe has been excluded from international financial markets since the suspension of its repayment of its debt to multilateral financial institutions, including the World Bank and the International Monetary Fund (IMF), in the wake of the failure of agrarian reform launched in the early 2000s by former president Robert Mugabe.
Recurrent US dollar shortages and US sanctions against relatives of current Zimbabwean leaders, including President Emmerson Mnangagwa’s son, have also driven potential investors away.
Officially launched in October 2020, the Victoria Falls Stock Exchange will be housed in the new financial centre. This stock market currently has eight listed companies that have been attracted by USD exchanges, capital gains tax exemptions and the ability to repatriate funds.
Source : Agence Ecofin