Mutapa Investment Fund US$2billion debt sparks fears of large scale looting

A staggering US$2 billion debt to the Mutapa Investment Fund and excessive government spending have sparked widespread criticism of the 2025 National Budget, raising concerns over fiscal transparency and the prioritisation of essential services.

The Zim for All Foundation, a non-partisan social, economic and political pressure group dedicated towards advocating for the rights and welfare of all Zimbabweans worldwide, has expressed particular concern over the Office of the President’s 117% overspending in 2024, while sectors like healthcare and higher education received significantly less than their allocated budgets.

This disparity, according to the foundation, reflects a lack of prioritisation for essential services.

The Mutapa Investment Fund, a sovereign wealth fund, has also come under scrutiny. The foundation is demanding full disclosure of the fund’s operations, governance structure, and strategic direction to ensure transparency and accountability.

Mutapa is a state-owned fund that invests in Zimbabwe’s future.

“Moreover, the reported US$2 billion owed to the Mutapa Investment Fund raises serious questions about transparency and accountability in the management of the nation’s resources.

“We call for full disclosure of the sovereign wealth fund’s operations, governance structure, and strategic direction to ensure that it serves the interests of the people rather than perpetuating economic inequalities,” the foundation stated.

In his budget presentation, Finance Minister Mthuli Ncube counted on the Mutapa to help grow the country’s economy.

The fund focuses on six main areas: minerals, energy, technology, transport, agriculture, and finance. It has made significant investments and its portfolio is valued at around US$16 billion.

“The Mutapa Investment Fund, as the country’s Sovereign Wealth Fund (SWF) is poised to contribute to the country’s economic growth and development by leveraging on strategic sector investments to create long-term sustainable value in sectors, which include mining, energy and manufacturing,” he said.

The foundation, further, criticised the punitive taxation framework, which it argues disproportionately burdens the poor and informal sector.

It called for a more equitable approach to taxation and urged the government to broaden its revenue base by addressing mining sector leakages.

Ncube unveiled a series of new taxes and royalties as part of the country’s 2025 budget.

He said the measures, aimed at boosting revenue, include the restoration of duty on imported public service buses, increased excise duty on selected alcoholic beverages, and the introduction of a 10% withholding tax on gross winnings of sports betting punters.

Other notable tax changes include the removal of tax holidays for Special Economic Zones, replaced by a 15% Corporate Income Tax, and the introduction of a Fast Foods Tax on certain food items.

Taxes will also be imposed on the emerging sector, including fabric merchandisers, clothing sellers, and spare parts dealers.

Additionally, a 25% rental income tax will be applied to residential properties converted to business premises.

To offset the impact of these new taxes, Ncube has offered some relief measures.

These include an increase in the tax-free income threshold, a reduction in Capital Gains Tax on Marketable Securities, and the exemption of Liquefied Petroleum Gas from VAT.

Customs duty on electric motor vehicles will also be reduced, and VAT deferment will be allowed for the energy sector.