Why Mutapa Investment Fund must prioritise agri-food sector.

This is the first of two blogs focusing on why the Mutapa Investment Fund must leverage its assets for profitable impact investment that is aligned with national objectives, primarily in the agri-food sector.

In September of last year, the Government of Zimbabwe renamed and restructured the original 2014 Sovereign Wealth Fund, now the Mutapa Investment Fund, with former Reserve Bank Governor, Dr. John Mangudya at its helm, vesting it with government shareholdings in a number of state-owned entities and former parastatals along with other government investments.

The Mutapa State, which gives its name to the freshly renamed fund, was a kingdom (c. 1450-1902) which stretched from the Zambezi valley into the Mozambique lowlands and towards the fringes of the Kalahari Desert. The state developed an economic system whose three pillars were agriculture, trade, and mining. This economic system was responsible in the rise, expansion and growth of a vast trading empire.

In the past few years, sovereign wealth funds (SWFs) have become more active in Africa than ever before. Governments have opened up to the idea of establishing their own investment arms to fill critical gaps in financing projects and trigger increased investment in priority sectors. With the right combination of innovation and risk management, Africa’s government investment arms can have a powerful impact in key economic sectors, according to a study by the global consulting firm, the Boston Consulting Group.

Among the vested state-owned entities are major agricultural and allied sector concerns, including AFC Holdings (which this year celebrates a century of agricultural financing), Allied Timbers Zimbabwe , Silo Food Industries, Cotton Company of Zimbabwe, Cold Storage Commission, and ARDA Seeds. Now with a controlling stake in ZimRe, following approval to acquire businessman Hamish Rudland’s controlling stake in one of the country’s biggest insurance and property investors, Mutapa now also controls CFI Holdings, another major player in the agriculture sector.

The placing of these agricultural giants under Mutapa creates one single entity that has potential to move the dial significantly for agricultural and agro-industry transformation in the country, accelerating growth and innovation that will bolster the agri-food sector and support the country’s efforts in addressing challenges in achieving food security. It now has a unique role to play in the development of the economy.

The consolidation of these companies under Mutapa can facilitate collaboration and integration prospects, and Mutapa can prioritise investments in ventures and technologies that will enhance food production, processing, and distribution, driving growth and innovation across both the food and agribusiness sectors.

This will not only help address food security priorities for present and future generations in accordance with the Government’s national food security objectives, but underscore a commitment to impact and sustainability. President E.D. Mnangagwa, from his inauguration, has repeatedly emphasized prioritised focus on agricultural transformation to drive industrialisation and wider economic reconfiguration and growth.

The fund’s investment strategy, as it rationalises its portfolio, must be aligned to priority areas of development, primarily agriculture, with Mutapa at the centre of that development.