FIRST Mutual Wealth Management general manager, Thomas Mutswiti, says collaboration and innovative thinking are crucial for businesses to thrive in Zimbabwe's turbulent economy, plagued by currency and policy uncertainty.
According to Mutswiti, the volatile currency landscape poses significant challenges for investors, particularly in project funding.
"So, one of the biggest challenges that we also even faced when we were doing this project (Varsity Heights student accommodation in Chinhoyi) is the volatility within the currency, especially when you are funding projects with the local currency and you face depreciation that happens on the currency," he told businessdigest in an interview.
"You know you get, maybe your aggregates that you are using or your raw materials, the prices they tend to move faster. So you can have the risk of overruns from a project cost perspective but you try as much as possible to pre-purchase and pre-fund as much as you can so that you immunise yourself against that risk."
Zimbabwe is currently experiencing economic hardships, characterised by inflation, power cuts, currency and exchange rate volatilities, among other issues. The authorities recently devalued the Zimbabwe Gold currency by 43% to save it from collapse.
To navigate these challenges, Mutswiti advocated for collaboration and strategic planning.
"But also one of the big things that have really come to the rescue is the collaboration that then happens across industry partners. It is well and good if I do this project on my own but it is much easier when you have maybe five investors,” he said.
“When one is struggling, the other one maybe is in a better space. So that is how we try to mitigate some of these issues of funding risks and so forth, but it is just the uncertainty within the policy environment that tends to be the biggest risk for most of these investments."
- Collaboration crucial for business survival
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Last Friday, President Emmerson Mnangagwa commissioned Varsity Heights, a premier student accommodation facility in Chinhoyi, valued at US$8,8 million.
The facility, owned 80,33% by the Public Service Pension Fund (PSPF), accommodates 384 students, providing decent accommodation and essential amenities, including comprehensive security, fibre-linked Wi-Fi, a gym, and student-centred facilities.
The PSPF partnered with First Mutual Life, First Mutual Health, Deloitte Pension Fund, Nicoz Diamond Insurance, Acol Chemicals Pension Fund, and the Local Authorities Pension Fund to develop this project.
First Mutual Wealth Management, a unit of First Mutual Limited, manages and maintains the facility.
According to Mutswiti, First Mutual also partnered with PSPF to develop a tourism project (boutique hotel) in the Nyanga area. The project has since been completed and handed over to an independent operator.
"We identify the opportunities that are there, the partners that we can work with, and we also identify the needs of the investors to say where the sweet spot is. We still meet the needs of the returns for the investors, the development from a government perspective, and also just protecting value for everyone else."
In Zvishavane, the company is also a co-investor and project manager in the development of mixed-use duplex clusters, three to four-storey apartments, and student hostels.
