Government has clarified incorrect assertions that State-owned enterprises (SOES) whose shares are vested in the renamed Mutapa Investment Fund are now exempt from the provisions of the Public Procurement and Disposal of Public Assets Act.
Following the publication of an extraordinary Government
gazette on the PRAZ Act last Friday, there have been incorrect claims in
certain quarters, including news media, that had largely misinterpreted the
contents and implications of new legal provisions on the Mutapa Investment
Fund.
Finance, Economic Development and Investment Promotion
permanent secretary Mr George Guvamatanga told delegates attending this year’s
edition of the Zimbabwe Economic Development Conference in Victoria Falls
yesterday that the statutory instrument, which brought about the provisions,
amending the Sovereign Wealth Fund of Zimbabwe (SWFZ) Act, also amended the
Public Procurement Act and Disposal of Public Assets Act.
He said Section 3 of the SWFZ Act already dealt with the
issue of which institutions may be accorded exemptions, and that there was
nothing new as the legal provisions were already in place before the
promulgation of the latest amendments.
“So, that amendment has made it possible that these
entities that operate in competitive markets may be accorded an exemption from
the application of the Procurement Act.
“Therefore, on Friday, President Mnangagwa exempted one
entity, which is the Mutapa Investment Fund, from the application of the
procurement law,” he said.
Mr Guvamatanga said that in order to clear the air, in
terms of the law, as contained in the general notice published last Friday, the
exemptions apply only to the fund and not to any other entities listed on the
schedule of the recently published SI.
“The fund merely owns shares in those entities but does not
change their legal character or separate legal entities distinct from the fund.
So, all these noises that all the institutions have been exempted from are not
correct,” he said.
The fund Mr Guvamatanga, by its nature, would operate and
compete in competitive markets, both local and international, competing against
private and agile equity funds.
He said that as a result, the fund will need to be quick,
efficient, and cost-effective, and in some instances, by its nature, it will be
involved in market-sensitive transactions, which would require such
transactions to be handled differently.
“As such, it was important to place it on par with its
peers. The fund, through its structures, will be governed by best-practice
rules and procedures in the area of procurement.
“The institutional framework introduced by the changes made
in the Act is designed to provide a robust organisational design to enable it
to achieve its objective as stated in the Act,” said Mr Guvamatanga.
He noted that from a reporting perspective, the fund would
be required 60 days after the end of each financial year to submit to the
President and to the relevant minister an annual report on its operations and
activities for the presiding year, and the reports would be shared publicly.
Through Statutory Instrument (SI) 156 of 2023 gazetted last
Wednesday, President Mnangagwa used Presidential Powers (Temporary Measures)
(Investment Laws Amendment) Regulations, 2023, to change the name of the fund.
The fund is a state-owned investment entity established
from the balance of payment surpluses, official foreign currency operations,
the proceeds of privatization, Government transfer payments, fiscal surpluses,
and resource earnings.
It was created in 2014 following the enactment of the
Sovereign Wealth Fund Act.
Mr Guvatanga said the Government was determined not only to
earn a return on its investments, but also to create employment, operate
profitably, and contribute to the economy.
“The Act was amended in terms of which certain shares that
the Government owned in various companies are now vested in the sovereign
wealth fund created under the Act, which has now been renamed the Mutapa
Investment Fund.
“These funds form part of the initial capital for the fund.
They might not be performing well and have liabilities, but they also have
assets, so these assets form the initial capital of the fund,” said Mr
Guvamatanga.
He added that the fund itself is wholly owned by the
Government, albeit managed by a board, and as such, the ultimate beneficial
owner of the shares remains the Government.
Mr Guvamatanga added that the current board of the fund
will be enhanced with a skills mix to effectively oversee fund operations, and
an appropriate substantive management team will be appointed thereafter.
The 20 companies whose shares were vested in the fund
include Zesa Holdings, Telone, POSB, Zupco, Netone, Powertel, Air Zimbabwe,
Hwange Colliery, Cottco, and Air Zimbabwe.
Analysts have since said the move was long overdue, as
management of the state entities will fall under one professional agency. Herald
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