Mutapa Investment Fund seeks over US$10bn to revamp State enterprises

LIVINGSTONE MARUFU

The Mutapa Investment Fund (MIF) requires more than US$10bn to expand operations across its portfolio companies, as the sovereign wealth fund accelerates its drive to transform State-Owned Enterprises (SOEs) into viable commercial entities.

Todate, MIF, has raised US$1bn.

This capital mobilisation initiative is intended to increase operational efficiency, expand operations, and support disciplined growth across all its clusters.

In its annual report released last week, Mutapa stated that it maintains a cluster-wide funding pipeline prioritising infrastructure refurbishment, capital expansion, and recapitalisation.

“Total funding requirements exceed US$10bn, with approximately US$1bn raised to date for portfolio companies. Funding sources include debt, equity, public private partnerships [PPPs], and joint ventures with development finance institutions, banks, and private investors,” the report states.

It adds: “Strategic capital deployment aims to support modernization, operational efficiency, and sustainable growth across clusters.”

While MIF reports significant progress in stabilising and restructuring its portfolio companies, with ongoing efforts to improve governance and financial performance, it acknowledges that substantial work remains.

“Challenges remain in addressing legacy debts, governance weaknesses at investee companies, and liquidity constraints. The Fund’s strategic outlook focuses on transitioning from planning to execution, enhancing portfolio monitoring, enforcing governance reforms, and driving value creation through targeted investments and collaborations,” the Fund said.

The fund’s stated goal is to contribute meaningfully to Zimbabwe’s economic growth, fiscal stability, and long-term prosperity.

In response to questions raised about governance and accountability, MIF emphasised its commitment to robust standards.

“MIF places strong emphasis on good corporate governance, compliance, and capacity building. The governance roadmap includes diagnostic assessments, board training, ESG framework development, internal and external audits, and alignment with international best practices,” it said.

“The Fund focuses on compliance with regulatory requirements, managing legal risks, and supporting effective governance through standardised reporting and training.

Key governance targets include achieving 90% compliance with Santiago Principles, 100% board member induction, and continuous professional development.”

To guide the transformation of its portfolio companies, Mutapa has instituted a strategic framework operating under the acronym “FIRE”: Fix (address governance and operational weaknesses), Invigorate (Revive) (restore operational capacity and market confidence), Reinforce (Strengthen) (expand capacity and consolidate gains), and Extract (realize returns through dividends and strategic disposals).

“This framework is necessary and appropriate for MIF to achieve its mandate through ‘igniting its assets with FIRE’ for operational impact which is aligned to the National Development Strategy priorities and contributing towards the attainment of Vision 2030 of a prosperous upper middle-income country,” Mutapa explained.

“The Fund aims to maximise value creation and social impact by transitioning investee companies into commercially viable, high-performing assets. Investment approaches focus on asset optimization, revitalizing dormant assets, and deploying catalytic capital to unlock new potentials.”

The Fund is responsible for appointing high-calibre boards to provide strategic oversight and promotes sound business practices within its investee companies. It supports the development of portfolio and diversification strategies, and carries out its own investment activities as the principal investment arm of the Zimbabwean government.

MIF’s principal income sources are dividends and management fees from portfolio companies, profits on investments, and, periodically, third-party funding for new opportunities.

Mutapa was established by an Act of Parliament in 2014. Originally founded as the Sovereign Wealth Fund of Zimbabwe, it was fully operationalised and renamed the Mutapa Investment Fund through Statutory Instrument 156 of 2023.

The fund was remodelled to become the strategic investment arm of the government through the transfer of 30 commercial SOEs from line ministries to its management.

The Fund is a product of research conducted by the State Enterprises Restructuring Agency (SERA), intended to improve SOE performance by eliminating bureaucratic inefficiencies and enhancing governance through benchmarking against global sovereign wealth funds.