From : Newsday.co.zw

By : Nqobile Bhebhe Senior Reporter

20 March 2012

Reserve Bank of Zimbabwe Governor Gideon Gono says Cabinet has approved implementation of an offshore financial hub to be established in Victoria Falls.

Addressing guests at a Confederation of Zimbabwe Industries meeting in Bulawayo last week, Gono said the institution would be known as the International Financial Centre (IFC).

Gono said operational modalities were being crafted and personnel had been sent to other countries to study its implementation.

An offshore financial centre — although not precisely defined — is usually a small, low-tax jurisdiction specialising in providing corporate and commercial services to non-residents in form of offshore companies and investment of offshore funds.

“Once set up, it would become the growth nucleus of Matabeleland provinces, transforming the region into the financial capital of the country,” he said.

Gono said participants to the IFC would enjoy “relaxed business environment”.

“The IFC, as in other countries such as Botswana and Seychelles, is associated with huge capital inflows, so Matabeleland would once again become the economic hub.

“It would be an offshore centre, though part of Zimbabwe. We will ring-fence it so that it operates like an offshore centre. Those with money can bring it to Victoria Falls with no questions asked, no exchange control regulations and we won’t even know how you got that money. You bring and take it out as you wish.”

Gono said the project was now at an advanced stage and both central bank and the Finance ministry were working out regulations on how it would operate.

“Projects such as Matabeleland Zambezi Water Project that have been lacking funding would be funded by it,” he said.

Confederation of Zimbabwe Industries Matabeleland president Ruth Labode said the IFC would help revive the region and also create employment.

An IFC should be able to support foreign trade, currency exchange, transfer of funds across political boundaries, facilitate foreign borrowing and lending, and advance foreign direct investment.

There are four main types of IFCs namely primary, funding, booking and collection centres. They are differentiated by their operations in terms of the origin of the clientele they deal with.

Primary financial centres are hubs of international banking and finance in their market area and offer a wide variety of financial services.