‘Capital markets drive sustainable economic growth’

GOVERNMENT says it has initiated work on the development of a financial sector strategy to provide a blueprint for the development of the financial sector with focus on harnessing the ingenuity of capital market innovators.

This will align with the National Development Strategy 1 (NDS1).

In his keynote address during the inaugural capital markets conference in Nyanga yesterday, Finance deputy minister David Mnangagwa said the alignment would drive inclusive growth.

“I am aware that in the past, our capital markets have faced challenges including the inability to attract foreign investment, high transaction costs and liquidity issues,” he said.

“Government remains committed to the long-term growth and sustainability of the capital market, hence the deliberate agenda to continuously strive towards currency and overall macroeconomic stability.

“Government is also reviewing measures that were meant to deal with a speculative bubble on the market and very soon new conducive measures will be made public. Government has also initiated work on the development of a financial sector strategy to provide a blueprint for the development of our financial sector.

“With regards to capital markets, the focus will be on harnessing the ingenuity of capital market innovators to align with the NDS1 towards inclusive growth, promotion of new enterprises, employment generation and leveraging on technology to modernise capital markets.”

The inaugural capital markets conference is being held through a partnership between the Zimbabwe Independent, the Zimbabwe Stock Exchange and the Securities and Exchange Commission of Zimbabwe.

The conference is running under the theme Fostering the Zimbabwe Capital Markets for Sustainable and Responsible Investing: Opportunities for Investments.

Mnangagwa said capital markets drove sustainable economic growth by facilitating long-term investments in infrastructure, innovation and, therefore, job creation.

He said the government fully supported the work being done by the Securities Exchange Commission of Zimbabwe and capital market institutions in facilitating and rolling out investment vehicles such as Tigere and Eagler REITs and various Exchange Traded Funds.

“It is also the government’s desire to work closely with the capital market in funding government projects spanning from energy and road infrastructure, water and sanitation, agriculture and climate financing, health and education, among others,” he noted.

He challenged capital market institutions to come up with innovative funding solutions for both business and government.

“Businesses should raise capital without relying solely on personal funds or bank loans,” he said.

“Capital markets demand regulatory frameworks that ensure fair market practices and investor protection, practices that promote competition and innovation in the financial markets and more importantly, connect domestic and international markets, facilitating global capital flows.

“Internationally, demand for transparency, trust and accountability are on the rise, and since we are part of the global capital flows, these are our responsibility too, if we are to be a relevant and credible player, in the drive to secure greater inbound investment.”

The deputy minister said market development was a joint responsibility with the conference being a great forum to foster the spirit of collaboration.

“Surely, the capital market can meaningfully contribute towards achieving these set objectives. It is on platforms of this nature that as a market, you come up with collective practical solutions towards this worthy cause,” he said.

“I urge you as a market, to prioritise programmes that improve overall financial sector stability by continuously aligning your market legislation with the changing operating environment, ensuring robust oversight to combat market malpractices, enhance efficiency and transparency in your business operations, collaborate locally and beyond borders while broadening and deepening your market to meet the needs of all investors.”-newsday