HARARE – Econet Wireless Zimbabwe, the country’s leading mobile operator and one of the most valuable corporate names on the Zimbabwe Stock Exchange (ZSE), has quietly kicked off a strategic financial shift that could redraw the nation’s capital market map. The company has formally entered discussions with the ZSE to voluntarily delist its core stock and pivot the value of its property and infrastructure assets into a new entity on the US dollar‑based Victoria Falls Stock Exchange (VFEX), a move analysts believe could unlock billions in latent value and expose deep structural challenges in Zimbabwe’s financial markets.
TELCO TOWER SPIN‑OFF MEETS CAPITAL MARKET REALITY
At the heart of the proposal is the creation of Econet Infrastructure Company Limited (Econet InfraCo), a new vehicle consolidating Econet’s towers, property holdings, and renewable power installations. These are among the company’s most valuable and cash‑generating assets, mirroring a trend seen across Africa where telecom giants such as MTN, Vodacom, and Airtel Africa have carved out tower units to monetise infrastructure and attract global capital.
Econet’s company secretary, Tatenda Ngowe, confirmed that engagements with the ZSE have begun with a view to publishing a formal circular to shareholders outlining the proposed voluntary delisting of Econet Wireless Zimbabwe Limited (EWZ) and the listing of Econet InfraCo on the VFEX. Under the plan, existing shareholders would be offered up to 30 per cent of InfraCo shares through a voluntary exit offer paid in a mix of cash and equity, while Econet itself would retain 70 per cent ownership.
Ngowe stressed that the valuation of the new entity would be set by an independent valuation expert to ensure fairness, transparency and regulatory compliance — a key reassurance amid fears that delisting could leave minority shareholders disadvantaged if handled poorly.
WHY THIS MOVE MATTERS – FOR INVESTORS AND MARKETS
The rationale driving Econet’s strategy is straightforward: Zimbabwe’s local‑currency capital market has consistently undervalued its stock relative to domestic and pan‑African peers, many of whom trade at 6–8 times EV/EBITDA, multiples that reflect stronger earnings, clearer asset valuations and access to US dollar capital. By contrast, EWZ shares have languished on the ZSE, constrained by macroeconomic instability, currency risk and thin liquidity.
Listing infrastructure assets on the VFEX, which operates in US dollars, offers a more fitting platform for infrastructure and real‑estate style assets, where global investors are more comfortable pricing long‑duration cash flows and hard‑currency earnings. This could significantly boost liquidity and valuation multiples, effectively unlocking shareholder value that has been trapped on a ZSE trading platform plagued by discounting and foreign capital flight.
For shareholders who elect not to participate in the VFEX offer, Econet has said pre‑emption rights will be reinstated, allowing private trading of delisted EWZ shares, a necessary concession given the potential removal of a major publicly tradable stock from the ZSE.
BLOW TO ZSE, BOOST FOR VFEX?
Analysts are already calling the move a major blow to the ZSE, which has in recent years seen high‑value delistings as companies shun the local exchange’s low valuations. Econet alone accounts for roughly a third of the ZSE’s market value and ranks among its most liquid stocks. Its departure could diminish market depth, dampen investor confidence and force the exchange to rethink its value proposition.
The shift also raises strategic questions about the divide between the ZSE and VFEX. While the VFEX was designed to attract US dollar capital and new‑economy investors, its growth has been slow and its impact uneven. Econet’s infrastructure listing could provide a much‑needed catalyst for VFEX’s credibility but may also widen the gap between the two bourses, leaving the ZSE to manage legacy, local‑currency tied corporations with diminishing appeal to foreign and institutional investors.
FOLLOWING AN AFRICAN TREND – BUT WITH LOCAL TWISTS
Econet’s move mirrors a broader African telecom trend where infrastructure assets are either sold or listed separately to unlock value. In South Africa, Vodacom and MTN have employed similar strategies, with tower companies attracting private equity and institutional capital at strong valuations. However, Zimbabwe’s macro constraints, currency liquidity, inflation risk and capital controls, add complexity absent in more mature markets.
For Econet, which dominates Zimbabwe’s telecoms landscape, with approximately **88 per cent of voice traffic, 82 per cent of data usage and 73 per cent of subscribers, this shift is also a strategic hedge. Monetising hard assets in a US dollar context could provide greater financial resilience and fuel expansions in renewable energy and digital infrastructure, areas that are core to future telecom growth beyond traditional voice services.
THE BIGGER QUESTION FOR ZIMBABWE’S CAPITAL MARKETS
Econet’s proposal forces a broader inquiry: Can Zimbabwe’s local capital markets evolve to meet the needs of modern corporations? If stars like Econet choose bourses outside the traditional local platform, what does that mean for domestic savers, pension funds, and institutional investors who have limited alternatives for hard‑currency liquidity?
The delisting and relocation strategy may offer shareholders a path to real value, but it also underscores the persistent weaknesses in the ZSE’s structure and investor appeal. If left unchecked, this trend could widen the divide between global capital flow and local financial inclusion, a dilemma confronting many emerging markets tethered to volatile domestic currencies.
Conclusion – VALUE UNLOCKED, BUT AT WHAT COST?
Econet’s engagement with the ZSE over its proposed delisting and VFEX listing of infrastructure assets is a bold strategic pivot that could reshape Zimbabwe’s capital markets. It aligns with global telecom financial practices and promises enhanced value for shareholders, but it also exposes systemic challenges in the ZSE’s ability to retain marquee stocks.
For investors, policy‑makers and market watchers, the unfolding developments warrant close scrutiny, not just for the immediate impact on Econet’s share price, but for what it reveals about the future of Zimbabwe’s financial architecture in a globalised economy.
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