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Observers believe that Zimbabwe's sovereign wealth fund will be used to loot the country assets

Zimbabwe's sovereign wealth fund, also known as Mutapa Investment Fund (MIF), has raised concerns among some observers, who worry that the fund could be used for corruption or personal enrichment by President Emmerson Mnangagwa and his allies.

The Fund was established in 2014, but was largely inactive until recently. In 2021, the government made substantial amendments to the Sovereign Wealth Fund of Zimbabwe Act 2014, which gave the president more control over the fund and reduced the role of Parliament and other oversight bodies.

The MIF is now one of the largest investment funds in Zimbabwe, with assets estimated at over $1 billion. The fund's stated goal is to attract foreign investment and boost economic growth. However, some critics worry that the fund could be used to finance government projects that are not transparent or accountable. There are also concerns that the fund could be used to reward Mnangagwa's allies or to fund his re-election campaign in 2023.

In September 2023, Zimbabwe’s President Emmerson Mnangagwa promulgated a law that made profound changes to the governance of the country’s sovereign wealth fund. But, while Mnangagwa argues that the government is making changes to “give a new lease of life to previously under-performing state-owned enterprises,” the move has caused widespread disquiet.

The law, which President Mnangagwa enacted using his special presidential powers, strengthens his ability to appoint senior staff and board members. Using the same special powers, the president has also transferred ownership of 20 state entities in the mining, transport, oil, railways, communications, power, and agricultural sectors to the Fund. Furthermore, President Mnangagwa has removed the Fund from the provisions of the country’s Public Procurement and Disposal of Public Assets Act. This releases it from lengthy procurement procedures in the buying and selling of assets but also removes any need for transparency in making such transactions.

In addition to concerns about governance and transparency, some critics also worry that the MIF is investing in risky or illiquid assets. For example, the fund has invested in a number of government-owned companies that are struggling financially. The Fund has also invested in mining projects, which are notoriously risky and can take many years to generate returns.

The MIF has defended its record and said that it is committed to transparency and accountability. However, the fund has not yet published any audited financial statements, making it difficult to assess its performance or the risks it is taking.

However, the MIF's concentration of power in the hands of the president raises concerns that the fund could be used for corruption or personal enrichment. The Fund has already been accused of nepotism, with some of Mnangagwa's close associates being appointed to senior positions in the Fund. The MIF has invested in a number of government-owned companies that are struggling financially.

The MIF will need to address these concerns if it is to build trust with the public and investors. The Fund should publish audited financial statements, strengthen its oversight mechanisms, and adopt a more conservative investment strategy.


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