Tshabangu's MPs question validity of Mutapa Investment Fund valuation

Opposition parliamentarians have raised concerns over the validity of the Mutapa Investment Fund's (MIF) asset valuation, pointing to discrepancies between the reported US$16 billion valuation and earlier disclosed figures for Kuvimba Mining House, a major subsidiary.

In April 2024, reports indicated that MIF acquired private investors' shares in Kuvimba Mining House for US$1.6 billion, using treasury bills - short-term government debt - as the mode of payment. Kuvimba, which owns numerous gold, lithium, nickel, and platinum mines, was seen as a key asset for MIF.

Mbizo legislator Cobarn Madzivanyika expressed concern about the lack of oversight of the MIF, particularly the removal of the Auditor-General's scrutiny. He voiced fears that the absence of transparent audits could lead to a lack of accountability and potential financial losses.

"Parliament must understand what is happening in Mutapa because those are national resources, and all national resources must be available to scrutiny," Madzivanyika said during a Parliamentary debate on the Finance Bill.

He pointed out that, in a previous transaction, when the government acquired 35% of Kuvimba's shareholding, it was valued at US$1.6 billion. Based on this, he argued that Kuvimba alone should be worth around US$5 billion, but the most recent US$16 billion valuation of MIF seems inconsistent with that estimate.

"If you look at the valuation of US$16 billion, which was given a few weeks back, it is not consistent with the remaining companies under Mutapa," Madzivanyika added, questioning the accuracy of the reported figure.

Edwin Mushoriwa, the Dzivaresekwa legislator, also highlighted the financial risks associated with MIF. He noted the government's significant loans to the fund, amounting to over US$2 billion, which will ultimately be borne by taxpayers.

"The known information so far is that our broke government has so far loaned Mutapa Fund more than US$2 billion, whose financial costs will be carried by taxpayers," Mushoriwa said, stressing concerns about the long-term financial implications.

Mushoriwa also criticized the way changes to the Sovereign Wealth Fund (now renamed MIF) were introduced through the Finance Bill, instead of a stand-alone Bill that would allow for public scrutiny and greater transparency.

"Changes to the Sovereign Wealth Fund (now Mutapa) should have come through a stand-alone Bill and allow public scrutiny rather than the current system where amendments are tucked inside Finance Bills," Mushoriwa added.

Further complicating the situation, MIF now owns a significant portion of key government parastatals, including Hwange Colliery Company, the National Oil Infrastructure Company of Zimbabwe, and the Zimbabwe United Passenger Company, among others. This broad portfolio raises further questions about potential risks and the Fund's management.

The MIF, formerly known as the Sovereign Wealth Fund, was established by the Zimbabwean government in 2014 through the Sovereign Wealth Fund Act. In September 2023, it was renamed Mutapa Investment Fund through Statutory Instrument 156 of 2023, enacted by President Emmerson Mnangagwa using the Presidential Powers (Temporary Measures) Act.

Opposition MPs are calling for more transparency and accountability in the management of national resources, with some calling for a clearer legal framework for the fund's operations to prevent potential financial mismanagement.