Laws governing Mutapa Fund subsidiaries set for overhaul

Business Reporter

THE Government will review all laws governing State-owned entities (SOEs) under the Mutapa Investment Fund to correct inconsistencies, eliminate overlaps and streamline operations, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has said.

The review has been necessitated by the transfer of various entities to the fund, which has highlighted the need for a unified legal framework to ensure efficient management and oversight of the enterprises that are key economic enablers.

Some observers have expressed concern about the overlap of certain laws governing the companies, arguing that they could impede the efficient operations of the entities, and hinder transparency and accountability.

“A comprehensive review of the various laws governing SOEs will be undertaken to address inconsistencies and overlaps, as well as provide clarity on the operations of all companies under the fund,” said Prof Ncube in the 2025 Budget Strategy Paper.

The review of the laws comes as Mutapa is set to establish a governance framework to oversee its investee companies.

The framework is meant to foster good corporate governance, enhance transparency and optimise resource allocation for efficient service delivery aligned with national priorities, Prof Ncube said.

He said the consolidation of some State entities under the fund was a critical step in transforming the performance of SOEs by ensuring disciplined application of the entities’ resources to meet national targets.

Through a diagnostic scan and review of current operations, the fund will identify strategies to optimise performance, including developing new products, having sound finance structures for specific projects and bringing strategic investment partners where necessary, especially in the natural resources sector.

The Sovereign Wealth Fund Act (Chapter 22:20), which established the Sovereign Wealth Fund of Zimbabwe, was promulgated in 2015.

Since then, the operationalisation of the fund progressed slowly as the Government was exploring various efficient ways of capitalising it.

Following comprehensive consultations with stakeholders, President Mnangagwa made a decisive move to operationalise and adequately capitalise the Mutapa Investment Fund. The critical decision involved amendments to the Sovereign Wealth Fund Act through Statutory Instrument 56 of 2023.

These amendments included the initial transfer of Government shareholdings in 22 entities to Mutapa.

In addition, the fund’s name was changed from the Sovereign Wealth Fund of Zimbabwe to the Mutapa Investment Fund, as stipulated in the Mutapa Investment Fund: Presidential Powers (Temporary Measures) (Investment Laws Amendment) Regulations, 2023.

The fund is undergoing a significant restructuring of its portfolio of companies and appointing new boards to enhance strategic direction and governance.

Mutapa chief executive officer Dr John Mangudya recently said the changes seek to optimise the fund’s operations for wealth creation and long-term economic stability.

Dr Mangudya, formerly the Governor of the Reserve Bank of Zimbabwe, emphasised the importance of selecting board members with the necessary expertise to align with the fund’s objectives.

The fund is conducting rigorous background checks on potential board members to ensure they meet stringent criteria. Once approved, their appointments will be vetted further by relevant authorities.

“As part of our ongoing operationalisation efforts, we are actively appointing expired boards and addressing incomplete boards within companies under Mutapa’s control,” said Dr Mangudya.

“We conduct thorough probity checks to ensure prospective directors possess the necessary experience and skills that align with the fund’s strategic goals.

“This rigorous due diligence process is followed by additional vetting by relevant authorities,” he added.

Other entities that now fall under the purview of Mutapa include NetOne, the National Railways of Zimbabwe, Air Zimbabwe, TelOne, Cottco, National Oil Company of Zimbabwe, Cold Storage Company, Fidelity Gold Refinery, Homelink, Zimbabwe Power Company, the Industrial Development Corporation of Zimbabwe and Hwange Colliery Company Limited (now HCCL Holdings).

Mutapa is considered a crucial element in achieving medium- to long-term economic stabilisation.

By enhancing the productivity of its entities, the fund is seen as instrumental in fostering currency stability and overall economic resilience.