Zimbabwe - Bond market: Reserve Bank lifts restrictions on foreign investment
The Reserve Bank of Zimbabwe has removed its restrictions on the participation of foreign investors on the primary and secondary bond market.The Reserve Bank of Zimbabwe has removed its restrictions on the participation of foreign investors on the primary and secondary bond market.
Until now, they were only allowed to subscribe to primary bonds
up to 35 per cent and were forbidden to purchase on the secondary market.
The Governor of the Central Bank, John Mangudya, told Xinhua on Thursday that the removal of these restrictions was designed to encourage direct investment flows to Zimbabwe, in a bid to boost the financial market.
Foreign direct investments were limited to $400 million (€314.7 million) last year, the lowest amount of all countries in southern Africa, Xinhua noted.
Zimbabwe’s economy remains in a fragile state, with an unsustainably high external debt and massive deindustrialisation and informalisation, according to the African Development Bank (AfDB).
Technologies are outdated and the country is affected by corruption and structural bottlenecks that include power shortages and infrastructure deficits.
The financial system also faces liquidity challenges, including the lack of and high cost of capital and revenue underperformance.