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Tendai Biti


Mutapa Investment Fund project: calculated multi-billion grand heist



PRESIDENT Emmerson Mnangagwa’s controversial Mutapa Investment Fund (MIF) — formerly the Sovereign Wealth Fund (SWF) — is a calculated grand heist scheme designed to help the politically connected to snatch up valuable state assets at dirt-cheap prices and flog them at huge profit, Russian oligarch-style, a former cabinet minister has said.


Tendai Biti, former Finance minister, says the MIF is unconstitutional, illegal and opaque, as well as murky and muddy to ensure that it is not transparent and accountable to facilitate looting on an industrial scale.

“The Mutapa Investment Fund is conceptually flawed; it is like an asset management behemoth created to house state enterprises and related assets illegally, make them fungible and easily transferrable. It’s not a typical Sovereign Wealth Fund as we know it. It’s not like Norway’s US$1.4 trillion Sovereign Wealth, the biggest in the world, for sure,” Biti told The NewsHawks in an interview.

“A normal sovereign wealth is a state-owned investment fund comprising of money generated by government surplus reserves or its resources to create wealth for current and future generations. It’s a pool of assets owned and managed directly or indirectly by governments and invested in stocks, bonds, real estate, precious metals, or in alternative investments such as equity funds or hedge funds to achieve national objectives.

“For instance, before this Mutapa scam, we had created a proper sovereign wealth fund in 2014 because Zimbabwe has world-class deposits of gold, platinum, diamonds, chrome and now lithium. Yet these are non-renewable natural resources so we need to exploit them for current and future generations. Collect royalties and invest them in a sovereign wealth fund.”

Biti says the changing of SWF to MIF has created a conduit for industrial-scale looting.

“Mnangagwa’s opaque structure is a scheme for a grand heist. We will witness unprecedented grand scale looting and industrial-scale corruption under this Mutapa Fund. The structure is flawed conceptually. It is also unconstitutional. It is illegal. It was established through a statutory instrument, a presidential decree, violating the constitution, laws and principles of separation of powers,” he said.

“In terms of section 134 of the constitution, Parliament may, in an Act of Parliament, delegate power to make statutory instruments within the scope of and for the purposes laid out in that Act, but its primary law-making power must not be delegated; statutory instruments must not infringe or limit any of the rights and freedoms set out in the Declaration of Rights; statutory instruments must be consistent with the Act of Parliament under which they are made; the Act must specify the limits of the power, the nature and scope of the statutory instrument that may be made, and the principles and standards applicable to the statutory instrument; statutory instruments do not have the force of law unless they have been published in the gazette; and statutory instruments must be laid before the National Assembly in accordance with its Standing Orders and submitted to the Parliamentary Legal Committee for scrutiny.

“In this case, a statutory instrument or presidential decree was used to transfer 20 state enterprises into MIF. The question is: Does this meet the legal test to justify the action, for instance was it an emergency, is it in the national interest or is it consistent with the legal framework or laws under which it is made?

“The changing of SWF to MIF was not an emergency, it could wait; it wasn’t in the national interest to bundle together state assets for an unexplained purpose and it undermined various Acts that govern some of those state enterprises. Basically, Mnangagwa, as head of the executive, sought to replace Parliament, which is another pillar of the state together with the judiciary. That is unconstitutional and unlawful.

“The waiving of state procurement laws and process on MIF is also illegal. It violates the constitution, the laws and international best practices.”

Biti said the MIF is a muddy quagmire, in which only catfish — the dishonest and corrupt — can survive and thrive.

“Bringing into one pool 20 parastatals which are established differently, National Railways of Zimbabwe, Zesa, TelOne, NetOne, POSB and Air Zimbabwe, for example, creates a messy situation. The reason they did that is not to consolidate ownership, as government already owns the assets, but to ensure fungibility so that they flog them for personal enrichment and corrupt purposes.

“Given that Mnangagwa basically controls everything under one roof, state assets will now be privatised through the backdoor. There are many laws which apply to privatisation and investment that have been overridden by the President in the process over and above the Acts of Parliament establishing some of the parastatals, for instance the Privatisation Act, Zimbabwe Investment and Development Act and Zimbabwe Investment Authority Act.

“Mnangagwa is now substituting Parliament for himself, undermining the sovereign institution, the constitution and various laws. This is about capture of state enterprises and plunder.”

Fadzayi Mahere, a legislator of the main opposition CCC and lawyer, said:“The most concerning feature of the recent purported amendment to the Sovereign Wealth Fund of Zimbabwe Act by Mnangagwa is that it is unconstitutional in a number of respects.

“As a starting point, the amendment was introduced by way of a statutory instrument, which violates section 134 of the constitution. The said section prohibits the enactment, amendment or repeal of legislation by way of a statutory instrument. Only Parliament can make, change or remove laws.

“It is no answer to this charge that the statutory instrument was gazetted purportedly under the Presidential Powers (Temporary Measures) Act — this statute itself offends section 134 of the constitution.

“In the event of a conflict, the constitution is supreme. It follows that Mnangagwa’s statutory instrument that changed the Sovereign Wealth Fund of Zimbabwe was invalid, ultra vires the constitution and thus illegal as a matter of a law. It additionally breaches the section 68 obligation of all administrative authorities to act lawfully, reasonably and fairly.”

On the 19 September, Mnangagwa controversially promulgated Statutory Instrument 156 of 2023 (SI 156/2023) which changed the name of the Sovereign Wealth Fund of Zimbabwe to the Mutapa Investment Fund. No official reasons have been given for the renaming of the fund.

State enterprises or parastatals now commandeered to be under the dodgy MIF include Defold Mine, ZUPCO, Kuvimba, Silo Investments (Grain Marketing Board commercial arm), the National Oil Company of Zimbabwe, the Cold Storage Commission, Petrotrade, POSB, Netone Cellular, the National Railways of Zimbabwe Holdings and NRZ Ltd, TelOne, ARDA Seeds, Zimbabwe Power Company, Powertel, Allied Timbers, Telecel Zimbabwe, Air Zimbabwe, Industrial Development Corporation, Cottco, AFC Limited and Hwange Colliery.

To make matters worse, Mnangagwa has the unfettered power to add and remove companies to the list as and when he pleases. 

The effect of putting all the companies under one roof is to create a behemoth whose operations and transactions are not subject to public procurement laws, parliamentary oversight or disclosure to the public.

This undermines constitutional principles of good governance, transparency and accountability.

MIF fund managers and employees are “sworn to secrecy”, further making it opaque and vulnerable to corruption, while blocking access to information. The fund will be able to transfer and externalise foreign currency without foreign exchange controls.

The process has hallmarks of how Russian state assets were sold for a song or brazenly stolen during its transition from socialism to capitalism.

Russian oligarchs made their money by snatching up valuable state assets at dirt-cheap prices.

They used various methods to grab the properties. Sometimes oligarchs stripped their acquisitions of assets or acquired natural resources and then sold them off and shipped the money abroad.

Once Boris Yeltsin became President of Russia in July 1991, the oligarchs emerged as well-connected entrepreneurs who started from nearly nothing and became rich through participation in the market via connections to the corrupt, but elected, government of Russia during the state’s transition to a market-based economy.

When the Soviet Union collapsed in 1991 after decades of communist authoritarian rule, it was a historic and monumental global event full of hope and new possibilities.

The Cold War ended, and political, economic and military alliances that had shaped the world for nearly a half-century were reconfigured practically overnight.

The Soviet Union’s fiercest enemy, the United States, hailed the fall as a victory for democracy and evidence of capitalism’s superiority over socialism. For the majority of Russians, the transition to a market system was painful, chaotic and anything but democratic.

Amid the chaos of the country’s reorganisation, however, a few shrewd businessmen rose to the top.

In just a few short years, Russia’s crown jewels became the private possessions — which is what Mnangagwa is trying to do — of a small group of corporate raiders who have now come to be known as the Russian oligarchs.

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