Guvamatnga clarifies the exemption question on the Mutapa Investment Fund.
Brian Rungano Temba
Permanent Secretary for Finance George Guvamatanga has responded to allegations raised by Opposition Parliamentarian Fadzayi Mahere over the Mutapa Investment Fund.
Mahere hurled corruption allegations towards the government and national treasury over Parastatals listed under the Fund as being exempted from the Procurement Law.
Clarity on the matter was given by Perm Sec Guvamatanga while giving a presentation at the recently held Zimbabwe Economic Development Conference (ZEDCON) in Victoria Falls.
“On Friday, His Excellency President Emmerson Mnangagwa exempted one entity, which is the Mutapa Investment Fund from the application of the Procurement Law.
The exemption applies only to the Fund and not to any other entity listed on the schedule. The Fund merely owns shares in those entities but does not change the legal character of the entity.
So all this noise about the exemption applying to all entities is not correct,” said Prem Sec Guvamatanga.
The purpose of the Fund’s exemption, unlike Mahere had misquoted, was also clarified by Perm Sec Guvamatanga as giving it a competitive advantage considering the already existing hurdles of red tape, black balling and hostility of the illegal sanctions on the international market.
This resonates with the intentions of the Second Republic to manoeuvre the markets retaining gains through investments as enshrined in the Transitional Stabilisation Programme (TSP) and National Development Strategy phase 1 (NDS1).
“The reason why the Fund has been exempted is because, by its nature, it will operate and compete in competitive markets in both local and international markets.
It will compete with private equity, and such type is businesses therfore the Fund will require flexible, quick, efficient and cost effectiveness.
By its nature it will be involved in market sensitive transactions which will require a different style of operating,” added Perm Sec Guvamatanga.
The Mutapa Investment Fund was created by parliament in 2014 after the passing of the Sovereign Wealth Fund of Zimbabwe Act
Name changed from “Sovereign Wealth Fund of Zimbabwe” to Mutapa Investment Fund according to Statutory Instrument (SI 156/2003) on September 19.
Parastatals and entities listed under the Fund include; Defold Mine, ZUPCO, Kuvimba, Silo Investments (GMB commercial arm), National Oil Company of Zimbabwe, Cold Storage Commission, Petrotrade, POSB, Netone Cellular, National Railways of Zimbabwe Holdings & NRZ Ltd, TelOne, ARDA Seeds, Zimbabwe Power Company, Powertel, Allied Timbers, Telecel Zimbabwe, Air Zimbabwe, Industrial Development Corporation, Cottco, AFC Limited and Hwange Colliery.
According to Investopedia.com, a sovereign wealth fund is a state-owned investment fund comprised of money generated by the government, often derived from a country’s surplus reserves. SWFs provide a benefit for a country’s economy and its citizens. The funding for an SWF can come from a variety of sources.