Story by Yolanda Moyo
ZIMBABWE is set to issue the first operating licences for the Victoria Falls International Financial Services Centre, marking a major step in the country’s efforts to attract global capital and position itself as a regional financial gateway.
Zimbabwe’s bid to establish the country as a regional financial services hub is entering a new phase.
Within weeks, Government is expected to issue the first licences under its International Financial Services Centre, which will come as a key vehicle for global financial inflows and investments into the country.
Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, says Zimbabwe is not trying to reinvent the wheel – instead, the country is learning from fast-growing global economies.
“The rules for the operationalisation of the International Financial Centre are now in place. We have a board in place, and in the next two weeks, we’ll be issuing our first licences under the International Financial Centre. We want this to be a model offshore financial centre in the region, in Africa, and one that can compete with similar international financial centres around the world. We’ve also been doing quite a bit of benchmarking. We have benchmarked against the UAE, Hong Kong, Mauritius, and the Isle of Man, among other similar institutions around the world.
“Our executives have been travelling extensively to understand how best to position our International Financial Centre. The new financial centre in Vietnam is of particular interest to us because its level of development is similar to that of Zimbabwe. We watch what they do, learn from their experiences, and our teams have visited and returned with valuable insights. In the next few weeks, we will start issuing our first licences under the International Financial Centre,” he said.
Analysts welcomed the move but cautioned that long-term success will depend on investor confidence, policy consistency and macroeconomic stability.
“It’s a very good move because they are now operationalising policy. Once we start getting a number of operators coming to operate within the Victoria Falls Financial Services Centre, it becomes a mechanism for attracting international capital. So, it’s kudos to the authority. What we must bear in mind, however, is that there are several international financial services centres in the world. We are joining a whole gamut of countries that offer offshore financial services.
“Therefore, we must have some competitive edge. The competitive edge that we have is that we are African and we are on the continent. We must be aware that we will compete against countries like Botswana, for example, because they have a similar offering. We must therefore find a competitive edge that will enable us to attract international capital from countries that are already attracting investment successfully, such as Mauritius.
“Mauritius is the most attractive offshore financial services centre that we would be competing with. We need to compare and contrast ourselves with Botswana and Mauritius, which are the nearest and most successful examples to date. We are playing catch-up; therefore, we must position ourselves to be more attractive than these two countries, at least,” economic analyst, Nigel Chanakira said.
“Overall, the centre’s success will depend on its credibility, stability, and access to correspondent banking relationships. It will also depend on ensuring that the special economic zone status is maintained for the location where the International Financial Centre has been established,” Economist, Professor Julius Tapera said.
The launch places Zimbabwe into an increasingly competitive market for cross-border financial services, where established hubs such as Mauritius and Botswana are already attracting significant international capital flows in the region.
It is also in line with President Dr Emmerson Mnangagwa’s Zimbabwe is Open for Business mantra.
The first licences may be modest in number, but for investors, they will provide the clearest indication yet of whether Zimbabwe can translate financial sector reforms into a platform capable of attracting long-term international capital.
