Business Reporter
A prominent economist has expressed optimism that the incoming Mutapa Investment Fund (MIF)chief executive officer Doctor John Mangudya has the capacity to turn around state enterprises falling under the fund.
Previously known as the Sovereign Wealth Fund, the MIF has so far been given control of 20 State Enterprises and is expected to revamp the institutions to profitability in a bid to unlock the much needed value and resources for national development.
In a recent comment, economist Persistence Gwanyanya bemoaned the country’s heavy dependence on tax revenues underscoring the urgent need for parastatals to be turned around as an alternative revenue source.
“Overall , 95% of the country’s National Budget is funded by taxes.This makes the resuscitation of State Owned enterprises (SOEs) extremely urgent.With Dr Mangudya eventually assuming the the helm of MIF which will hold shareholding of 20 SOEs, turnaround of these entities becomes possible.
Remember ,Dr Mangudya has dealt with most SOEs in one way way or the other as a Governor of the Reserve Bank of Zimbabwe (RBZ),” he said.
He underscored that SOEs used to contribute more than 40% to the fiscus but are now draining to the same.
Meanwhile ,MIF has taken over a 37,1% shareholding in Cottco Holdings Limited as the fund accesses a key asset that can post profits.
The takeover by Mutapa was first announced last year as part of the Finance, Economic Development and Investment Promotion ministry’s plan to give the fund profitable State entities to attract foreign investment for government.
Treasury intends to use this foreign investment for its capex which it said is US$40 billion.
These profitable State entities which number 22 include liquid companies that combined now give Mutapa billions of US dollars in taxpayer-funded firms to manage.
“Following the promulgation of Statutory Instrument 156 of 2023, we wish to advise shareholders that government’s 37,1% shareholding in Cottco Holdings Limited, previously held in the name of Finance and Economic Development ministry is now held through Mutapa Investment Fund,” Cottco said in a trading update.
Mutapa’s acquisition of a stake in Cottco comes at a time when the parastatal is in talks with Treasury, the central bank and financial institutions to raise US$6,8 million to pay off cotton farmers for deliveries.
