IN recent years, the visibility of State-Owned Enterprises (SOEs) in Zimbabwe has diminished strongly, leading many of them to be regarded as relics of the past, struggling in what could be termed a ‘corporate graveyard’.
The introduction of the Mutapa Investment Fund (MIF) marks an exciting development in efforts to rejuvenate these critical economic players. As Zimbabwe’s first Sovereign Wealth Fund, MIF is strategically positioned to leverage resources from the mining sector and other natural assets to stimulate long-term growth and development in the country.
Since its establishment through the Sovereign Wealth Fund Act of 2014, and its subsequent renaming in September 2023 by President Emmerson Mnangagwa, MIF has set out to implement strategic initiatives aimed at revitalising struggling parastatals. Led by Chief Executive Officer Dr John Mangudya, the fund has already begun working closely with various investee companies, showcasing a proactive approach to addressing deep-rooted issues entrenched in corporate governance and operational inefficiencies.
Historical context of the corporate graveyard
Historically, many SOEs in Zimbabwe were once vibrant contributors to the national economy, playing significant roles in sectors such as transport, agriculture, and energy. However, over the years, poor management practices, lack of accountability, and the misallocation of resources resulted in these entities becoming mere shadows of their former selves. Critically, many of these companies have struggled to operate profitably or provide value to taxpayers, eroding public trust in government institutions.
Addressing these challenges requires a comprehensive, strategic approach. Unfortunately, prior initiatives to reform SOEs often lacked the necessary direction and cohesion to yield tangible results. The MIF’s formation could potentially herald a new era of corporate governance and operational effectiveness for these enterprises.
A comprehensive strategy for resurgence
In its first year of operation, MIF has deployed strategies aimed at rescuing parastatals from the brink of collapse. For instance, the fund is working alongside ZUPCO, the national public transport operator, by implementing a procurement package aimed at augmenting public transport services. This initiative is crucial, especially in urban areas where public transport is the backbone of mobility for many citizens.
Similarly, MIF is collaborating with the National Railways of Zimbabwe (NRZ) to rehabilitate aging rail infrastructure and rolling stock, an endeavour that not only aims to improve freight and passenger transport, but also to enhance overall efficiency within the national logistics framework. Such developments not only create job opportunities but also revive sectors that are essential for economic growth. The MIF has also taken on the daunting task of revitalising other key entities such as Cottco, Silo Foods, Air Zimbabwe, and the Cold Storage Commission (CSC). By developing sustainable operational models for these organisations, MIF is laying the groundwork for long-term health and sustainability, moving them away from the brink of failure.
A critical area of focus for the fund is energy security, particularly through initiatives with the Zimbabwe Electricity Supply Authority (ZESA). The implementation of technologies like prepaid metering, smart metering, and net metering reflects a modern approach to electricity distribution, aiming to streamline processes and enhance service delivery. One of the stand out projects includes the rehabilitation of Hwange Units 1 to 6, which is projected to increase electricity supply by approximately 600MW. Improving energy supply is essential not only for households but also for industries dependent on a stable power supply to operate effectively. Therefore, the success of these projects holds the promise of restoring investor confidence and catalysing further economic activities across various sectors.
In tandem with operational improvements, MIF recognises the importance of governance. Strengthening board effectiveness and performance management are two facets of its strategy to boost productivity across its entities. By focusing on a client-centric approach, MIF is setting the stage for SOEs to become more accountable and responsive to the needs of their stakeholders. Moreover, optimising capital management and implementing best practices across the group represents a fiscal responsibility that is essential for the sustainability of these enterprises. Ensuring value for money will change the narrative around SOEs, positioning them as credible contributors to national revenue rather than as burdens on the state’s budget.
Recommendations for continued success
As the Mutapa Investment Fund embarks on this unprecedented journey, several recommendations can enhance its chances for lasting success:
Continuous Stakeholder Engagement: The MIF must ensure open channels of communication with stakeholders, including the general public, employees, and industry experts. This engagement can foster a collaborative environment, enabling MIF to identify needs, gather feedback, and adjust its strategies accordingly.
Capacity Building and Training: MIF should invest in training programs aimed at enhancing the skills of the workforce within the parastatals. Developing human capital is vital for ensuring that employees are equipped to adapt to new initiatives and embrace changes in operational practices.
Monitoring and Evaluation Mechanisms: Establishing robust monitoring and evaluation frameworks will enable MIF to assess the effectiveness of its interventions in real time. By setting clear performance indicators and regularly reviewing progress, the fund can make data-driven decisions to enhance its strategies, ensuring they remain aligned with its goals of revitalization and economic contribution.
In this view, the Mutapa Investment Fund represents a strong opportunity for Zimbabwe to reclaim the potential of its State-Owned Enterprises and, by extension, enhance economic resilience and growth. By focusing on strategic revitalisation efforts alongside corporate governance improvements, MIF is poised to lead these once-thriving bodies out of the graveyard and into a future of productivity and contribution to the national economy. The path forward may be challenging, but the commitment demonstrated by MIF thus far offers hope for a thriving Zimbabwean economy, driven by revitalised and accountable state enterprises.
Raymond Tendai Rusinga is a researcher in Zimbabwe, Harare. Please feel free to WhatsApp or call: +263 776 206 227 or email: rayrusinga02@gmail.com.
mailto:rayrusinga02@gmail.com.
He writes here in his personal capacity.
