Shareholders cream off US$1,6b from Mutapa

Zimbabwe's debt restructuring talks are at risk following revelations that the country's liabilities may have increased due to a secretive US$1.6 billion payment to unknown shareholders under the sovereign wealth fund, now known as the Mutapa Investment Fund.

The Sentry, a shadowy investigative organization, reported that this payment was allegedly made to Kudakwashe Tagwirei for his shares in Kuvimba Mining House, although Tagwirei denies ownership.

The Sentry's 2021 investigation suggested Tagwirei secretly owned up to 35% of Kuvimba, valued at US$4.6 billion, tripling the government's 2022 valuation. The lack of transparency surrounding the payment has raised concerns about potential overvaluation and misuse of funds meant for reviving state-owned enterprises.

President Emmerson Mnangagwa renamed the Sovereign Wealth Fund to Mutapa Investment Fund in September 2023, transferring government shareholdings in 20 entities to the fund. The fund, exempt from public procurement scrutiny, aims to manage state investments. The Sentry warned that the payment to Kuvimba shareholders might undermine confidence in Zimbabwe's debt restructuring process, which is facilitated by the African Development Bank (AfDB).

The Sentry recommended an audit of the Mutapa Investment Fund by the Auditor-General and public hearings by the Parliamentary Public Accounts Committee. They also called for enhanced due diligence by financial institutions and urged the AfDB to press the government for transparency regarding domestic debt holdings.

Mutapa Investment Fund, led by former Reserve Bank governor John Mangudya, recently added seven parastatals, including Zesa Holdings and Fidelity Gold Refinery, to its portfolio. The government has not yet responded to the Sentry's report.