HARARE – Finance Permanent Secretary George Guvamatanga has said that the general notice in the Government Gazette last week on the exemption of the Mutapa Investment Fund from the Public Procurement Act only applies to the fund itself and not to the companies whose shares are vested under it.
The companies under the Mutapa fund will still need to comply with procurement rules and while the Mutapa fund has that exemption, it will still be operated under good corporate governance systems.
In a general notice, President Emmerson Mnangagwa said Mutapa will be exempt from the Public Procurement and Disposal of Public Assets Act. However, Guvamatanga said: “To be clear, in terms of the law, as contained in the general notice published last Friday, the exemption applies only to the Fund and not to any of the other entities listed on the schedule. The Fund merely owns shares in those entities but that does not change their legal
character as separate legal entities, distinct from the Fund.”
He said the Mutapa Fund had been exempted from the law because by its nature it will operate and compete in competitive markets in both the international and local market, competing against Private Equity funds and such type businesses. “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, as investment bankers here will know, will require that such transactions be handled differently.”
He said as such it was important to place it at par with other comparable commercial Funds to enable it to operate optimally. He emphasised that like its peers, the Fund , through its governance structures, will be governed by best practice rules and procedures in the area of procurement. The institutional framework introduced by the changes in the Act is designed to provide a robust organisational design to enable it to achieve its objects as stated in the Act.
From a reporting perspective, the Fund will be required, 60 days after the end of
each financial year, to submit to the President and to the Minister an annual
report on its operations and activities for the preceding year. These reports will
be shared publicly.
Guvamatanga also defended the move to vest about 22 parastatals in the Fund saying: “The left pocket had holes so we simply moved the ‘money’ to the right pocket. The Fund itself is wholly owned by Government, albeit managed by a board. As such, the ultimate beneficial owner of the shares remains Government.”
He said that the entities form part on the initial capital of the Fund.