THE heads of a cluster of state firms transferred to the newly established Mutapa Investment Fund (MIF) were recently invited to the Reserve Bank of Zimbabwe (RBZ) for a day-long orientation programme, the Zimbabwe Independent can report.
Outgoing central bank governor, John Mangudya was appointed MIF’s first chief executive officer (CEO) in December.
He is due to begin his new role after his decade-long tenure at the RBZ expires on April 30.
The Independent was told that Mangudya took the CEOs through an in-depth presentation of how MIF will work.
President Emmerson Mnangagwa renamed the Sovereign Wealth Fund to MIF last year, mandating it to preside over 20 embattled state enterprises, some of them on the brink of insolvency.
These include the National Railways of Zimbabwe, Air Zimbabwe, Zimbabwe United Passenger Company, Cottco, Kuvimba Mining House, Silo Investments, National Oil Company of Zimbabwe, Cold Storage Commission Limited, PetroTrade, POSB, TelOne, Arda Seeds, Zimbabwe Power Company, Powertel Communications, Allied Timbers, Telecel, Industrial
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Development Corporation and Hwange Colliery Company Limited.
Last week the government added power utility Zesa Holdings, Homelink Private Limited, HomeLink Finance, Fidelity Gold Refinery, Export Credit Guarantee Insurance Corporation of Zimbabwe and Aurex to the list of firms under MIF.
Government’s plan is to rebuild the moribund firms and bring them back to viability under the stewardship of one firm, whose balance sheet will be valued at billions of United States dollars.
It means MIF may become one of the biggest firms in Zimbabwe, and its CEO one of the most influential executives.
“Late last year, all heads of parastatals placed under MIF were invited to the RBZ for a day-long orientation meant to familiarise us with how the entity is expected to function and how we must contribute,” one of the CEOs said.
“We also met and interacted with the MIF board. Mangudya gave a well detailed presentation on how MIF will operate. The presentation also covered how individual entities are expected to contribute towards the Fund,” he added.
The 10-member MIF board is led by former telecoms executive Chipo Mtasa.
But Mangudya said yesterday the Fund would ensure entities under its stewardship become self-sufficient.
"The primary mandate of the Fund is to safeguard national assets and sweat these assets to create value and wealth for the current and future generations,” he told the Independent.
"In this context, all the entities under the ambit of the Fund will be expected, in the medium term, to deliver value and be weaned away from the fiscus,” he added.
Some of the firms are saddled with legacy debts that cumulatively run into billions of dollars. Mangudya did not give details on how the debts would be cleared.
Reports from the Auditor-General attribute the debts to poor financial management, corruption and mismanagement.
Relating to the new reporting structure, sources said parastatal heads under MIF would be directly answerable to the Fund’s CEO, who would in turn report to the Minister of Finance, Economic Development and Investment Promotion.
“Heads of these parastatals will now be reporting directly to the MIF CEO. As we speak, most parastatals are positioning themselves to transition to the new reporting order,” another source said.
After the government announced it was transferring its shareholding in some parastatals to MIF, the firms were given 21 days to submit share certificates issued in the name of the Fund to Mangudya.
After that, Mnangagwa, through an extraordinary government gazette in October 2023 exempted the entities from public procurement regulations.
This triggered corruption fears.
In an interview with this publication in February, Mangudya allayed these fears.
“If you look at NetOne, for example, it is competing with Econet,” Mangudya said at the time.
“NetOne, like other entities, are in a competitive environment. If you give them some bottlenecks… if they want to procure a base station, Econet will go and buy one tomorrow while NetOne is still waiting. You cannot tell me that (exempting NetOne from the procurement law) is being corrupt.”
Broadly, the Procurement and Disposal of Public Assets Act requires state-owned enterprises to adhere to public tendering regulations.