The exit of Econet Wireless Zimbabwe from the Zimbabwe Stock Exchange (ZSE) should not trigger outrage at the company. It should rather trigger uncomfortable introspection at the Exchange and across the entire investment community.
Zimbabwe’s capital markets have been broken for two decades. Econet Wireless Zimbabwe is not the cause. It is a symptom of it.
Companies do not abandon functioning markets lightly. They leave when those markets no longer serve their interests or the interests of their shareholders. Econet’s decision to delist from the Zimbabwe Stock Exchange and list its infrastructure arm, Econet InfraCo, on the Victoria Falls Stock Exchange, is a rational response to structural weaknesses that have gone unaddressed for years.
Liquidity is thin, price discovery is distorted, and confidence has been eroded.
It has been more than three decades since the ZSE saw an issuance of real national significance, and that was Econet itself. This is not because Zimbabwe lacks companies of scale. It is because the Exchange has failed to create compelling value for issuers or durable returns for investors.
With Econet’s departure, debate has flared in the Press, boardrooms and across social media. That debate should not fixate on one company. It should interrogate the whole capital markets ecosystem. Questions must be asked.
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First, have pension and mutual funds served the long-term interests of their members? Have they surrendered excessive discretion to asset managers in ways that reward short-term trading over long-term value creation?
Second, as liquidity constraints steadily eroded pension assets, where was the coordinated push for structural reform from the funds? Did institutional investors use their influence to demand better regulation? Or did they adapt to dysfunction instead of challenging it?
What about the regulator? What did the Securities and Exchange Commission of Zimbabwe do to address the growing irrelevance and structural weaknesses of the ZSE?
The suspension of Old Mutual was a turning point. It caused foreign investors to exit in large numbers. The result was a sharp destruction of value in counters like Econet, which at the time had foreign ownership exceeding 30%. How forcefully did the investment community use its leverage to push for reform to protect market credibility?
Econet’s departure should be a call to action. Issuers feel voiceless and trapped in a system that extracts fees without delivering value. Brokers and asset managers have been rewarded more for trading volatility than for building investor returns. That orientation must change.
The Zimbabwean capital market cannot continue to rely on two counters, Econet and Delta. A healthy exchange cannot depend on a handful of names while failing to attract major listings.
The whole investment community, led by the ZSE, has an opportunity. It can engage issuers honestly and reform market structures, or it can continue to personalise systemic failure.
Blaming Econet is easy. Fixing the market is harder. But that is the work that now needs to be done.