Reactions To Exemption Of Mutapa Sovereign Fund From Procurement Procedures
President Emmerson Mnangagwa has exempted companies under the Mutapa Investment Fund (formerly the Sovereign Wealth Fund) from the Public Procurement and Disposal of Public Assets Act in Zimbabwe. This means that the companies under the fund, including TelOne, Kuvimba Mining, Petrotrade, and Noczim, are no longer required to follow the procurement procedures outlined by the Procurement Regulatory Authority of Zimbabwe when acquiring goods and services.
The decision to exempt these companies from open public procurement procedures was announced in General Notice 1546 of 2023, published in a government gazette on September 29, 2023. The notice seen by Pindula News states that the exemption was granted because the mentioned public entity operates in competitive markets and is deemed to require an exemption under the specified grounds of the Act.
Some commentators have criticized the exemption of companies under the Mutapa Investment Fund from public procurement procedures, suggesting it could lead to looting and personal gain. Journalist Mduduzi Mathuthu expressed concern saying:
A scandal! Guess who will be supplying those companies? The family!
Former Petrotrade Board chairperson Tinomudaishe Chinyoka, however, mentioned that procurement regulations sometimes hinder the competitiveness of government-owned companies, and an exemption might not necessarily be a bad thing if implemented properly. He said:
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From my limited experience, procurement regulations make it hard for government-owned private limited liability companies to be competitive. You can’t even cough without running a tender for it. And, being forced to buy things an 4 times their price just because that was the lowest bid you received to the mandatory tender is not how to run a business. So, with that limited experience, I don’t think this is necessarily a bad thing. The devil will be in the detail of how things actually work. Sometimes, not everything is amended to facilitate corruption.
Former Local Government Minister Saviour Kasukuwere criticized the move as an abuse of power and raised concerns about potential corruption. He said:
Mnangagwa’s Presidential Decrees Open Door to Massive State Asset Looting The recent renaming of the Sovereign Wealth Fund into the so-called “Mutapa Fund” by presidential decree and the subsequent transfer of selected state enterprises into that fund has shocked many and naturally attracted serious concern regarding the motives behind such a brazen move, especially without the consent of parliament, which is still to convene and is meant to protect the interests of citizens. Further to that, there is the recent promulgation, again by presidential decree, of a new statutory instrument that seeks to exempt the Mutapa Fund from the Public Procurement and Disposal of Public Assets Act (Chapter 22:23). There is no debate that public procurement procedures and the disposal of public assets have a profound impact on a nation’s developmental trajectory. Any country that wishes to maximize benefits from its assets and resources in a responsible manner and is also serious about accountability and transparency, therefore, needs to ensure that it has the appropriate laws, policies, and regulations in place to safeguard such public assets and resources from fraud and abuse.
Apostle Joel expressed strong condemnation, calling it industrial looting and a betrayal of accountability and transparency. He said:
Gold Mafia/Industrial Corruption Inc Zimbabwe ED has now officially personalized Zimbabwe after substituting the Sovereign Wealth Fund of Zimbabwe with a new one named Mutapa Investment Fund. ED’s hunger and thirsty to build his dynasty has manifested for all to see. Remember, the prophecy of inauguration of shame, dishonour. Remember, the throne of disgrace, humiliation. Cursed!! Leprotic!! Ahithophel wisdom. Corrupted wisdom. Whatever ED does is cursed, and offensive to the Zimbabwean citizens. The Mutapa Fund has assumed ownership of several state firms, and these companies are exempted from open public procurement procedures. Welcome to Industrial looting never witnessed in this country, even, when it was still Rhodesia. None has boldness to investigate, or stop this train of corruption, since all state institutions are captured. After zanufying Southern Africa, except for the few nations standing for righteousness and justice, vene is now personalizing Zimbabwe . This is very worrying. Accountability and transparency have been thrown out of the window. The Holy Scriptures have been fulfilled. To expect a bad man not to do wrong is madness. A man without God has no morals, and is not accountable to anyone. Pro 16:12 KJ2000 It is an abomination to kings to commit wickedness: for the throne is established by righteousness. Brothers and sisters, we are now open for business.
Member of Parliament (MP) for the Mt Pleasant Constituency in Harare, Fadzayi Mahere argued that the creation of the Mutapa Fund is illegal and allows for unprecedented looting. Fadzayi Mahere who is a member of the opposition Citizens Coalition for Change (CCC) said:
The uncomfortable truth is that the creation of the Mutapa Fund is illegal. Mr Mnangagwa doesn’t have the power to amend an Act of Parliament. The new looting vehicle is ultra vires the law & the Constitution. This dispensation is going for broke. Shameless. The looting that’s about to take place is stratospheric. Most parastatals & public entities incl ZUPCO, Netone & many others now fall under the unconstitutional Mutapa Fund. These entities are now exempt from the legal obligation to go through public tender procedures. Tragic.
Economic commentator Tinashe Murapata drew parallels with historical nationalization efforts, saying:
The confusion that is Mutapa Investment fund. What is happening is nationalization of commercial assets with direct control and command by the centre. Many of these assets were private, had private shareholders, parastatals, ran at arms length and now all directly bundled under the command of Mutapa. This is nothing new. This happened in Africa in the 1960’s where companies were bundled up through nationalization and a joint venture with a preferred private investor was pursued. It reminded me very much of Tiny Rowland – the preferred private investor and his foray in Africa. Herein my abridged essay on Tiny Rowland and what happened at the time. Striking parallels.
The Amalgamated Rural Teachers Union of Zimbabwe (ARTUZ) expressed concern about the possible stripping of national assets. Said the union:
On 17 December 2021, VP Chiwenga responding to allegations of a Coup plot by Chief Murinye, declared that Zimbabwe has one Monomutapa referring to @edmnangagwa Now the Mutapa Investment fund is being exempted from Public Procurement laws and procedures. Are Mutapa’s assets going to remain national assets? If these are national assets then the Procurement Act should be religiously applied on the Mutapa Investment.We are deeply concerned that Zimbabwe will be stripped of her assets.
