THE Mutapa Investment Fund (MIF) can now "freely" transfer funds in and out of Zimbabwe, and also liquidate the assets of 22 State enterprises that it controls, if new regulations proposed by the government come into effect.
The measures, contained in a draft Finance Bill prepared by Treasury to actualise several reforms introduced in the 2024 National Budget last week, bring the fund closer to being an asset manager.
A sovereign wealth fund (SWF) is a state-owned investment fund comprised of money generated by the government, often derived from a country's surplus reserves.
Comparatively, an asset manager is a firm that manages money on behalf of institutions, sovereign wealth funds, pension funds, corporations, and other large groups.
Among the measures proposed in the draft Bill, the MIF “without restriction or delay” can liquidate its assets and move income or proceeds from that in and out of Zimbabwe.
“With respect to investments made under this Act, the Fund may without restriction or delay in a freely convertible currency transfer the following funds into and out of Zimbabwe," reads the amendment 24 of the Bill.
Contributions to capital, such as principal and additional funds to maintain, develop or increase its investment;
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Proceeds, profits from the assets, dividends, royalties, patent fees, licence fees, technical assistance and management fees, shares and other current income, resulting from any investment of the Fund under this Act
Proceeds from the sale or liquidation of the whole or part of an investment or property owned by the Fund;
Payments made under a contract entered into by the Fund, including payments made pursuant to a loan agreement; and
Earnings and other remuneration of foreign personnel legally employed in Zimbabwe by the Fund or in connection with an investment of the Fund.
Former finance minister Tendai Biti is on record saying that the way the MIF was reconstituted was more in line with an asset management firm than a SWF.
Typically, a traditional SWF does not have such autonomy as it is answerable to other branches of the government, that is, the legislative and judiciary as it controls state assets.
However, the draft Bill allows the MIF to have much more autonomy than a typical SWF.
The Bill went on to state that any transfer of funds shall be allowed only after paying all tax obligations imposed on the amount to be transferred in accordance with the stipulated tax laws.
“Notwithstanding subsections (1) and (2), in the event of serious balance of payments or external financial difficulties, the Reserve Bank of Zimbabwe may temporarily restrict payments or transfers related to the Fund, provided that such restrictions are imposed on a non-discriminatory and good faith basis,” reads amendment 24 of the Bill.
Another proposal in the Bill would also allow the MIF to be able to pick and choose what information it can disclose from its operations, despite being in control of taxpayer funds, under the Amendment of section 28 of Cap 22:20.
“Except for the performance of his or her duties or the exercise of his or her functions or when lawfully required to do so by any court under the provisions of any law, no member of the Fund or employee or agent of the Fund shall disclose to any person any information relating to the affairs of the Board or Fund or any person, which he or she has acquired in the performance of his or her duties or the exercise of his or her functions.”
Currently, there are 22 State entities listed under the MIF that collectively have assets worth billions in the Zimbabwe dollars.
Some of these institutions receive budgetary support from taxpayers’ money.
They include Defold Mine, Zupco, Kuvimba Mining House, Silo Investments, the National Oil Company of Zimbabwe, the Cold Storage Commission, PetroTrade, POSB, NetOne and the National Railways of Zimbabwe.
Others are TelOne, Arda Seeds, Zimbabwe Power Company, PowerTel, Allied Timbers, Telecel Zimbabwe, Air Zimbabwe, Industrial Development Corporation, Cottco, AFC Limited and Hwange Colliery Company.