HARARE – The Zimbabwean government has made sweeping changes to the law, allowing the country’s sovereign wealth fund, Mutapa, to use state assets as collateral for loans.
This controversial amendment, gazetted on Friday, marks a significant departure from prior restrictions and raises concerns about the potential stripping of state assets.
The changes were made through amendments to the Administration of Estates Act and the Sovereign Wealth Fund of Zimbabwe Act. Notably, Section 22 of the Sovereign Wealth Fund Act—previously barring the use of the fund’s assets for loans—has been repealed.
The repealed section had explicitly prohibited the use of the fund’s assets for government credit or as collateral for debts, stating:
“The assets of the Fund shall not be used … as collateral for debts, guarantees, commitments or other liabilities of any other person or entity, whether public or private.”
The legislation had further declared any arrangement encumbering the fund’s assets as “null and void.”
Mutapa’s Expanded Powers
With the legal safeguards removed, Mutapa is now authorised to borrow against its extensive portfolio, which spans mining, agriculture, ICT, transport, real estate, banking, energy, and trading. Some of the high-profile entities under its control include:
- National Railways of Zimbabwe
- Air Zimbabwe
- ZESA
- Fidelity Printers and Refiners
- TelOne
- Cottco
- Hwange Colliery
Mutapa also oversees strategic national assets such as the National Oil Company of Zimbabwe, Petrotrade, and Telecel.
In October, Mutapa’s CEO, John Mangudya, disclosed that the fund’s portfolio had been valued at US$16 billion following a “comprehensive diagnostic assessment” conducted by unnamed “reputable accounting firms.” However, no further details on the valuation have been provided.
Concerns Over Asset Stripping
The legal changes come amid fears of state asset stripping, with critics pointing to Mutapa’s growing exemption from oversight mechanisms. In 2022, the government controversially excluded the fund from the Public Procurement and Disposal of Public Assets Act, allowing it to bypass the Procurement Regulatory Authority of Zimbabwe in transactions. Officials justified the move as a way to expedite investment decisions.
Observers have expressed concern that leveraging public assets to secure loans could jeopardise the country’s long-term financial stability, especially given Zimbabwe’s history of corruption and opaque financial dealings.
Critics argue the amendments could open the door to misuse of national resources under the guise of investment and borrowing, leaving state-owned enterprises vulnerable.
As Mutapa’s role in Zimbabwe’s economy continues to expand, transparency and accountability will likely remain central to debates over its operations and the broader implications for public assets.