Mutapa Fund’s  size not a deficiency but an opportunity – Expert

Business Reporter

 A financial expert, Owen Mavengere says the coming on board of the Mutapa Investment Fund (MIF) is a game-changer opportunity which can unlock cheaper funding pipeline for local enterprises.

Through various pieces of legislation, starting with the Presidential Powers Act, the Sovereign Wealth Fund of Zimbabwe was renamed to Mutapa Investment Fund (MIF), paving the way for repositioning the sovereign wealth fund.

Statutory Instrument (SI) 156 of 2023 brought about 22 state-owned enterprises (SOEs) under the huge umbrella of the MIF.

Subsequently, SI 51 of 2024 brought in another seven, to make the MIF one of the largest ever corporate bodies in the history of Zimbabwe.

The remarks come on the back of speculation by a number of stakeholders who are questioning the size of the MIF and its capacity to deliver in line with public expectations.

To this end a representative from the Parliament’s Public Accounts Committee (PAC) recently indicated the desire to engage the MIF for answers to the several speculative issues which have been raised so far.

However, Mavengere believes that there is nothing sinister about the size and objectives of the MIF as it remains in sync with global best practices.

“I will also expand on the concerns around the size of the fund and highlight that countries, though slightly different, have trillions under their sovereign wealth funds (e.g. Norway), so MIF is actually the correct size.

“If anything, it should even grow. The concerns around managing a large diverse conglomerate, though understandable, should be taken positively as economies of scale come into play,” he said.

He said given that the shareholder’s expectations can be reduced significantly to social mandate and profitability alignment should be straightforward to achieve.

“Continuing with the theme of having ethical and competent officials will ease any potential friction that might occur, thus making MIF’s size a huge advantage as opposed to a deficiency. The huge size will make raising capital a lot easier,” said Mavengere.

He said current plans to establish the MIF head office will go a long way to enable the fund to watch over such a huge portfolio and proffer dedicated research and development into areas of common interest.

Projects, which otherwise would be too capital intensive, can be explored and these can be technical and innovation, such as development of unique computer systems, which make sense if there is a huge off-take base that exists easily through the various MIF entities.

“In fact, MIF should grow, exponentially in perpetuity. The investments office of the entity, working closely with finance, should be continuously looking for opportunities to grow and opportunities to partner with other entities locally, regionally and globally.

“The new investments must be guided by the ESG principles and profitability. This will help spread risk and increase the return to the shareholder, i.e. the government. A venture-capital  model might need to be considered in the future as well,” added Mavengere.

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