Mnangagwa exempts state firms from Public Procurement scrutiny

By Alois Vinga

PRESIDENT Emmerson Mnangagwa has moved to shield selected state firms placed under the Mutapa Investment Fund (MIF) from being subject to the public procurement regulations.

Mnangagwa gazetted Statutory Instrument 156 of 2023 — a piece of legislation that changes the name of the Sovereign Wealth Fund (SWF) to Mutapa Investment Fund and brings together several State-owned enterprises under one roof.

The creation of the fund has always been vouched for by Finance Minister Mthuli Ncube since back in 2018 as he argued that parastatals scattered across different ministries was an old model that other countries are moving away from.

The latest set-up will see some 20 enterprises ranging from mining to telecoms, energy and agriculture falling under the ownership of the Mutapa Investment Fund.

But barely a week after the renaming, Mnangagwa, Friday moved to announce that the firms under the fund will not be subject to the Public Procurement and Disposal of Public Assets Act (PPDPA).

The order recorded under General Notice 1546 of 2023 as provided by the PPDPA Section 3 (9 which states that the President may, after consultation with the Authority by notice in the Gazette, be exempt from the application of the Act a prescribed public entity on specified grounds moved to exempt the state enterprises.

“And whereas the public entity below mentioned is operating in competitive markets and accordingly needs to be prescribed for the purposes of exemption by virtue of Section 3 (9) abovementioned.

“Now therefore, under and by virtue of powers vested in the President as aforesaid, I do hereby give notice that the public entity mentioned below is exempted from the application of the Act,” said the order in part.

The latest developments have triggered debate among market watchers with one school of thought standing in favor of the initiatives on the grounds that the initiative will give the state firms time to breathe and align to productivity.

They also contend that the move will subject the firms to stipulated regulations by one authority and in the process plug all past loopholes which saw politicians milking the firms.

However, some  fear that taxpayers checks and balances have been removed creating a vacuum of abuse by a few highly connected individuals.