INCOMING chief executive officer of the Mutapa Investment Fund (MIF), John Mangudya, has allayed fears of corruption around the fund after government exempted firms under the fund from following procurement law.
There are 22 companies under the MIF, with billions of dollars worth of assets.
Given the value of these firms, concerns around corruption have arisen as President Emmerson Mnangagwa exempted these companies from following the demands of the Public Procurement and Disposal of Public Assets Act.
“Billions worth of assets, yes (are under the MIF),” the Reserve Bank of Zimbabwe governor, who is scheduled to retire on April 30 and be replaced by John Mushayavanhu, the former CEO of FBC Holdings Limited, told businessdigest.
“I think there is a negative single narrative that bothers everyone in this country. The single narrative is about corruption.”
He added: “I think if it was a product, one could buy it, but it appears that it’s recklessly being used in this country whereby everyone goes to corruption with a negative single narrative which doesn’t help the country.
“Having said that, you need to first understand the mandate of Mutapa so that you can understand where I am coming from.”
He said the MIF’s fundamental mandate was to create value and wealth for current and future generations.
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Creating this wealth will be done by leveraging the 22 firms under the MIF to attract international investment that can then be channeled into critical capital projects.
Mangudya said a diagnostic assessment of MIF revealed too many bureaucratic processes.
“If you look at NetOne, for example, it is competing with Econet. But, NetOne, like other entities, are in a competitive environment. If you give them some bottlenecks like let’s if they want to procure a base station, Econet will go buy one tomorrow while NetOne is still waiting,” he said.
“Therefore, you cannot tell me that (exempting NetOne from the procurement law) is being corrupt. It (exempting MIF firms from the procurement law) is being done in good faith. Don’t tell me corruption is removed by being removed from PRAZ (Procurement Regulatory Authority of Zimbabwe). I am not sure if people know what they are talking about.”
He said that the companies under MIF were investee firms or portfolio companies that needed to be “sweated”.
“We need to sweat them so that they create value, wealth for the country. How do you do that? Obviously, we look at their governance structures, you need to enhance their performance,” Mangudya continued.
“By doing so, the money comes out and they become profitable. That profit is what we will then use to invest into the future generation for the country.”
Responding to Mangudya’s comments, procurement law expert Advocate Method Ndlovu said oversight could not just lay with the MIF’s management.
“I totally disagree with him. The establishment of anti-corruption entities is a testimony that corruption exists and hinders the attainment of vision 2030. So now, power rests in a few board members, illegally appointed for Christ’s sake. Who shall check on them?” he asked.
“Mutapa Fund was established through a statutory instrument and not an act of parliament per the law. What it does is that it takes state-controlled institutions like POSB, Allied Timbers and NRZ to fall under it. By doing so it results in a ripple and multi effects.”
He said some of these ripple and multifaceted effects included increasing corruption.
The removal of the MIF from the Act also means firms under the fund can be easily disposed of.
