Government Moves to Cut Zimbabwe Stock Exchange Listing Costs Amid Delisting Wave

Zimbabwe's government is actively seeking to reduce the cost of doing business on the Zimbabwe Stock Exchange (ZSE) in a bid to enhance its competitiveness and curb a trend of companies delisting or moving to the US dollar-denominated Victoria Falls Stock Exchange (VFEX).

Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube stated that the government has requested proposals from ZSE management to lower listing and operational expenses. This move comes as concerns mount over the financial burden of maintaining a ZSE listing, which has prompted several companies, including National Foods, Innscor Africa, and Lafarge Cement Zimbabwe, to delist in recent years. Market participants cite compliance costs, liquidity issues, and currency volatility as contributing factors.

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The two platforms, ZSE and VFEX, can grow together successfully. I think an issue that we need to deal with on the ZSE is the cost of doing business. I have asked management to come back to me with proposals so that those costs can be lowered in order for the ZSE to be competitive.

Professor Ncube emphasized that the ZSE and VFEX are not in direct competition but rather complementary platforms designed to foster the growth of Zimbabwe's capital markets. He explained that the VFEX's primary objective is to attract foreign direct investment by leveraging its status as a financial center, a role distinct from the ZSE's traditional focus on the local currency market.

The government's strategy involves nurturing various capital market platforms, including the ZSE, VFEX, Finsec, the commodity exchange, and the Zimbabwe Entrepreneurship Exchange. Each platform is intended to cater to specific investment opportunities and investor categories, with the overarching goal of promoting growth across the entire capital markets ecosystem. This holistic approach aims to ensure that all segments of the market can thrive.

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The VFEX, its primary job is to attract foreign direct investment, making use of the financial centre, especially economics on status, to attract foreign direct investment. That's not immediately available on the ZSE platform.