Econet Wireless Zimbabwe and African Sun are the latest to announce plans to delist, both citing the same problem, chronic lack of liquidity.
The growing list of companies exiting Zimbabwe’s stock exchanges points to a deeper structural failure.
On the Zimbabwe Stock Exchange, trading is heavily concentrated. Roughly 60% of all activity is accounted for by just two counters, Econet and Delta Corporation. That is not how a functioning market should operate.
The long-term trend is even more troubling. Around 70 companies were listed in 2000. Today, nearly three decades later, barely 40 remain actively traded. There has been no major new listing since Econet in 1998, despite the presence of several large, profitable companies that have chosen to stay away altogether.
The Victoria Falls Stock Exchange has not entirely solved problem either. It, too, struggles to attract depth and liquidity.
The reason is simple. Zimbabweans are not investing enough in shares.
Stock exchanges are not sustained by retail investors alone, they depend on large institutional capital, pension funds and mutual funds to provide long-term demand.
This is where the real crisis lies.
Zimbabwe’s pension funds are financially distressed, and the system appears to have avoided confronting that reality.
These institutions rely on contributions from workers, yet the formal economy has shrunk.
Fewer contributors, stagnant wages (in real terms) and legacy liabilities, have left pension funds structurally underfunded. As a result, pension funds today are not investing. They are liquidating.
To pay pensions and salaries, funds are selling assets rather than building portfolios. Their holdings in Econet and Delta, two of the few counters that pay reliable dividends and can be sold quickly, have become a lifeline.
Over time, however, these holdings have been steadily reduced, as shares are sold to meet short-term cash needs.
For listed companies, the consequences are corrosive. Businesses see little value in remaining on an exchange where they cannot raise capital, where pricing is divorced from fundamentals, and where they are spectators in a system dominated by brokers and asset managers extracting fees from volatility.
With few genuine buyers, share prices cease to reflect business performance.
The exchange begins to resemble a casino with too few players.
Econet is not the first company to say this out loud.
In 2020, Powerspeed delisted, citing persistent undervaluation.
It noted that while its balance sheet had been maintained in real terms, ZSE pricing focused on historic price-earnings ratios, rather than underlying asset values.
Its conclusion was blunt, a ZSE listing offered “very little benefit and considerable costs”.
That warning went largely unheeded.
Any credible solution must begin with pension funds coming clean about the scale of their challenges.
There must also be honest engagement across the market; regulators, exchanges, asset managers and issuers included.
Business owners need a real voice in how capital markets function. Without that, more exits are inevitable, and no new listings will come.
Viewed with a clear eye, Econet’s decision is about protecting shareholder value.
The company has been clear that it believes its shares are undervalued.
It has structured a post-delisting arrangement that allows pension funds to continue earning dividends while providing a mechanism to sell at better value than the current market offers.
This is a practical bridge while a longer-term solution is sought.
The planned listing of Econet InfraCo should be seen in the same light.
It effectively delivers a new, income-generating asset to pension funds and other investors; one with strong real-estate characteristics at a time when most funds no longer have the liquidity to enter that asset class directly.
In that context, the ZSE was right to keep Econet close by offering its over-the-counter (OTC) platform.
At least one major business remains engaged, rather than disappearing entirely.
Until pension funds are repositioned as long-term investors, Zimbabwe’s capital markets will continue to shrink.
Blaming companies for leaving avoids the real issue: the urgent need to rebuild the financial foundations of the institutions meant to sustain the market in the first place.
