'Offshore centre plans on track'

FINANCE minister Mthuli Ncube says Zimbabwe has made significant strides in its quest to set up an offshore financial services centre in Victoria Falls.

He said a planned commodities exchange would be a key component of the offshore financial services centre, which had been on the cards for some time.

The offshore financial services centre is expected to scale-up foreign direct investment inflows.

Speaking during a virtual workshop hosted by the Victoria Falls Stock Exchange (VFEX) in partnership with the Dubai Gold and Commodities Exchange (DGCX) yesterday, Ncube said the offshore financial services centre would help develop and deepen the financial services sector.

"We can all agree that investment is essential in driving economic growth and creating an attractive investment climate is one step towards achieving that," said Ncube.

"An offshore financial services centre is in reality an attempt to create an investment environment in which international capital can flow freely," he said.

He said the free flow of capital required supporting legislation.

Yesterday's event came after a high-level ministerial delegation accompanied the VFEX to Dubai recently, where the VFEX and DGCX inked a memorandum of understanding.

As part of the agreement, DGCX undertook to extend technical support, knowledge and skills to VFEX.

The organisations are planning to establish an international commodities exchange in Zimbabwe.

"My ministry has supported the VFEX since it was mooted as an idea and we are encouraged to see that such a young exchange is quickly looking to broaden its products and services.

"DGCX is a leading derivatives exchange in the Middle East and has played a pioneering role in developing the regional market for derivatives trading, clearing and settlement. It is, therefore, prudent and opportune for VFEX to tap into their expertise in setting up a commodities exchange," Ncube said.

He added that enhancing investment in the mining sector towards exploration, beneficiation and value addition of minerals including levelling the playing field to accommodate small-scale miners, would create more jobs and increase foreign currency earnings for the country.

The establishment of a local commodity exchange is one of the major steps towards achieving this goal, the minister said.

"If we are to make an impact in the global financial markets, we have to diversify from share trading into bonds and commodity trading.

"The growth in our financial markets will no doubt lead to creation of employment, increase export earnings in the formal channels and strengthen capital-raising opportunities for our extractive sectors.

"This will ultimately help in transforming our country to an upper middle-income economy in line with Vision 2030," Ncube said.