eBusiness Weekly
Business Writer
Some international investors are keen on participating in Government’s US$100 million bond that it intend to launch and list on the Victoria Falls Stock Exchange (VFEX), according to Finance and Economic Development, Professor Mthuli Ncube.
Mthuli is currently in Washington DC where he is attending the 2022 Spring Meetings of the World Bank Group and the International Monetary Fund (IMF) and related ancillary events taking place from 18-24 April 2022.
The Spring Meetings are composed of the joint World Bank-IMF Development Committee and the IMF’s International Monetary and Financial Committee events.
“We discussed the investment opportunity presented by the Zimbabwe USD bond that will be issued. We discussed the yield, guarantee structure, size of issuance, timing of issuance, and target market,” he said.
VFEX is a subsidiary of the Zimbabwe Stock Exchange (ZSE), launched as part of efforts to attract global capital and restore foreign investor confidence in Zimbabwe’s capital markets and help companies raise capital in foreign currency.
In his 2022 National Budget, Mthuli said the bonds would be issued to reduce the cost of borrowing and deepen the capital markets, with a particular objective of developing the Victoria Falls Offshore Financial Services Centre aimed at attracting foreign capital.
Mthuli said attending the International Monetary and Financial Committee, IMF, everyone welcomed the Resilience and Sustainability Trust to be funded from excess SDRs from the developed countries.
He said African countries will be able to borrow from the RST in order to deal with shocks largely as a result of the Global covid 19 pandemic and the recent global geo-political tensions.
Zimbabwe received the equivalent of US$961 million in Special Drawing Rights (SDR) from the International Monetary Fund, part of US$650 billion the IMF distributed to its members.
According to Mthuli, the US$958 million SDRs allocation will be utilised over a period of three years.
According to the IMF, the SDRs are meant to address the long-term global need for reserves, build confidence, and foster resilience and stability and to enable countries to cope with the impact of the Covid-19 crisis.
“In Zimbabwe’s context, the funds will be used prudently, with accountability and transparency to support projects in the social sectors namely health, education, and the vulnerable groups, productive sector value chains; infrastructure investment and foreign currency reserves and contingency fund.”
At the Spring Meetings, Minister Mthuli and his delegation met with Arnaud Buisse, France’s Executive Director at both the IMF and World Bank, and discussed progress on Zimbabwe’s economic reform agenda and debt arrears roadmap.
“We also discussed France’s general support for Zimbabwe’s development,” he said.
