The Mutapa Investment Fund (MIF) is set to leverage its vast mineral resources to capitalize on other key parastatals, according to CEO John Mangudya.
by Ryan Chigoche
He made this revelation on the sidelines of a recent event where Homelink, a subsidiary of MIF, officially launched a US$30 million housing project.
As amended, the Mutapa Investment Fund, Zimbabwe’s sovereign wealth fund, was established by the Sovereign Fund Act, Chapter [22:20]. It serves as the strategic arm of the government, capitalized through the transfer of strategic state-owned enterprises and investments to make them profitable.
At their peak, Zimbabwe’s state enterprises and parastatals contributed 40% to the Gross Domestic Product (GDP). However, due to poor management, corruption, and weak governance systems, their contribution to the economy has plummeted to an estimated 10%.
To bring the parastatals back to their former glory, CEO John Mangudya told Mining Zimbabwe that they would leverage mineral resources to capitalize on some defunct and poorly performing parastatals.
“The parastatals are currently contributing about 10-15% to the growth of the economy. To improve this, the companies need to be capitalized. The whole idea behind forming the Mutapa Investment Fund is to leverage our balance sheet—we take assets or resources from one sector and use them to support other companies. For example, we will leverage mining companies’ resources and redirect them into ZESA or NRZ,” Mangudya explained.
Recently, Mangudya stated that the fund undertook and already completed a diagnostic assessment of all 29 companies under Mutapa, including their subsidiaries.
Based on this analysis, Mutapa has categorized the parastatals into three blocks. The first block includes enablers of the economy such as ZESA and NRZ, while the second block comprises entities focused on increasing productivity, such as Silo and Allied Timbers.
Mangudya noted that some of these companies require capital injections, while others need changes in management style to achieve capitalization. He emphasized the necessity for an overhaul in corporate governance for some parastatals.
Making inroads in the mining sector recently, MIF injected US$10 million into Invictus Energy, an investment that Mangudya believes will significantly contribute to the long-term economic revitalization of the parastatals. The deal came about as Invictus floated 151,515,152 shares worth US$10 million in a private placement, with Mutapa underwriting US$5 million of the share issue, while a private equity fund, Mangwana Capital, injected another US$5 million to acquire the total shares on offer.
Entities under the purview of Mutapa include NetOne, Air Zimbabwe, TelOne, the National Oil Company of Zimbabwe, the Cold Storage Company, Fidelity Gold Refinery, Homelink, Zimbabwe Power Company, the Industrial Development Corporation of Zimbabwe, and Hwange Colliery Company.
