Delisting Old Mutual to eradicate economic distortions: Analysts

By ZBC Reporter
THE recommendation by the ruling Zanu PF party to delist Old Mutual from Zimbabwe Stock Exchange seeks to realign the economy by creating a stable financial system and eradicate economic distortions.

The recommendation comes after forensic investigations by authorities revealed that the use of the Old Mutual Implied exchange rate as a reference was encouraging parallel market activities which are responsible for the distortions in the economy.

War Veterans League Secretary-General, Cde Douglas Mahiya urged the government to heed the party’s call saying the financial and insurance giant has been responsible for the existing multiple monetary systems, rendering the central bank’s measures ineffective.

“Old Mutual in its current format poses huge risks to the development of this economy, hence we as a party support a new order where it is not allowed to cause distortions by continuing its participation on the exchange,” said Mahiya.

Economic analyst Collen Jonasi weighed in saying it is normal to take such a drastic measure for the purpose of safeguarding the country’s economic interests.

“It is quite important for any country to scrutinise the activities of its economic actors and ensure that they do not harm the proper functioning of the bigger economy. In the UK, whatever economic benefits brought by Hauwei would not outweigh their concerns about national security,” highlighted Jonasi.

The ruling Zanu PF party has proposed the listing of Old Mutual on an alternative foreign currency-denominated exchange such as the soon to be opened Victoria Falls Stock Exchange.