Kudzanai Sharara in Cape Town, South Africa
The Victoria Falls International Financial Centre has issued 81 licences since opening, its interim chief executive officer has revealed, exceeding internal expectations and outpacing regional peers as the jurisdiction moves to mobilise international capital.
The centre’s interim chief executive officer Mr Justin Bgoni told the CEO Africa Annual Roundtable, held from 6 to 10 October under the theme “The Future of Africa: Innovate, Trade and Grow”, that the 81 licences comprise 63 provisional licences and 18 registered companies.
The provisional licences are concentrated in capital markets, covering securities dealers, asset managers, investment advisory, collective investment funds, collective investment schemes, trustees, custody, transfer secretary, exchange and central securities depository functions.
Registered companies span a broader range of sectors, including business consultants, fintech, insurance and exploration.
Asked if the pace of licensing met expectations, Mr Bgoni said the centre had set a target of at least 100 licences by year-end and was on course to exceed it.
He said the centre has been working closely with other regulators, with the signing of memoranda of understanding expected to be a key development this year. Delegates at the CEO Africa Annual Roundtable in Cape Town heard details of the free-zone structure designed to overcome the obstacles that have historically deterred foreign investment in Zimbabwe.
WestProp Holdings chairperson and board member of the centre Dr Michael Louis told delegates that Zimbabwe established the centre for four reasons: to mobilise new capital, build deeper financial markets, create an internationally competitive jurisdiction and support the real economy.
“In the past, the capital that’s coming in now wasn’t there before, because they couldn’t take money in and out, they couldn’t deal with the hard currency and all the judicial things were all there,” he said of the first objective.
On the second, he described structures that include the VFEX as “completely different”.
The third, he said, rests on a distinct legal arrangement.
“You’re subject only to international law and international arbitration. You’re not subject to the courts of Zimbabwe,” he said, describing the arrangement as a question of “freedom of jurisdictions”.
The fourth, he added, ensures capital raised through the centre is not confined to banks but can be directed to energy, tourism, property and other enterprises.
Dr Louis set out the activities available through the exchange.
Investors can raise capital, list on the stock exchange, establish funds and asset management vehicles and access listed products, including real estate investment trusts, private capital and hedge funding.
“Banking and finance is going to be absolutely huge and we’re really looking to give out those banking licences now,” he said.
The centre will also focus on innovation, including digital legislation and tokenisation. For property and infrastructure, Dr Louis said the centre allows assets to be turned into investable propositions, with portfolios restructured and capital pooled across companies and investments.
The critical gain, he said, is liquidity.
“If you invest in a property, you know how difficult it is to get the money out of that property, because maybe you don’t get a buyer — I’m talking about the big properties, US$100 million or US$50 million or US$40 million,” he said.
“But now, if it’s listed and it’s got liquidity on one of your products, REITs and whatever, you can immediately, when you decide today you want to get out, you can put it up and take the money out,” he said.
He said the centre also opens the country to international investors for the first time.
“I’ve sat with so many of them since this Victoria Falls Investment Centre started,” said Dr Louis.
“The attitude towards Zimbabwe has totally changed. And for the first time they are looking to see how they can make use of it.”
Licence issuance outstrips regional peer
Dr Louis cited the pace of licensing as evidence of demand.
“In the first two months, 70 new licences have been issued by the Victoria Falls Exchange,” he said.
“In Rwanda, there was up to 30 in their first year. In our first two months, 70 licences, the Minister of Finance has already issued.”
He said the framework for property and real estate covers REITs, mortgages, tokenisation, crowdfunding and the conversion of international mergers and capital developments into liquidity.
“There’s one organisation that wants to put up three schools already because it’s going to make it much easier to develop schools through this international setting,” he said, adding that the centre would serve logistics, student and rental housing, retail tourism, affordable housing, healthcare and education.
Dr Louis described the broader ecosystem as spanning capital markets, banking, insurance, management companies, consulting, dispute resolution, arbitration, innovation and fintech, with renewable energy singled out as a future growth area.
Dr Louis, who said he helped draft the centre’s regulations, said the framework drew on the best offshore jurisdictions.
“We took all the laws from Hong Kong to Dubai, Mauritius and we looked at the best laws in all of those domiciles, and we’ve combined them.
“The regulatory reform is world class and absolutely outstanding. The fiscal proposition is outstanding,” he said.
Source: Victoria Falls Financial Centre hits 81 licences – herald
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