Finance Minister Mthuli Ncube
The Zimbabwean government is now moving to establish a regional multi-currency financial hub – Victoria Falls International Financial Services Centre – to offer banking and financial services under a special economic zone in Masuwe state land in the country’s premier resort town.
Zimbabwe has ambitions to make Victoria Falls – where is there is already a relatively new stock exchange – a prominent financial service centre and tax haven in Africa, like the Mauritius International Financial Centre, to play a crucial role in promoting investment, economic growth, and financial stability.
International financial service centres are jurisdictions that provide financial services to non-residents and are known for their favourable tax and regulatory environments.
Examples include Switzerland, the Isle of Man, Luxembourg, Monaco, Jersey, Guernsey, and Bahrain, among others.
These centres often offer services like low or zero taxation, moderate financial regulation, and banking secrecy, making them attractive for international financial activities.
The objectives of such centres
include attracting foreign direct investment, supporting regional trade, and acting as a gateway for international capital flows.
Functions vary, but commonly include regulatory oversight of financial institutions, providing infrastructure for financial services, and promoting financial literacy.
The Victoria Falls centre will not be subject to commercial law and courts of Zimbabwe unless stated in the regulations, for instance municipality by-laws will apply as indicated in the statutory instrument.
The centre, established in terms of the statutory instrument regulations, will have commercial matters emanating from its operations settled exclusively in terms of the laws established pursuant to that.
The Victoria Falls centre will be run by a chief executive and a board.
There will be a governing council which is controlled by the Finance minister and other officials offering strategic direction and steering development activities.
An advisory board run by the Reserve Bank of Zimbabwe and chief executives of investment and financial regulatory bodies will advise the council and the minister.
Further, there will be a technical advisory committee to advise the council and minister on technical financial and banking issues.
Given Zimbabwe’s country risk, negative political and economic operating environment and bad international reputation, this is a positive development which, however, can only work if there is political will, confidence, trust, rule of law, property rights and no undue official interference, among other important things.
Newshawks
