OM to invest US$200m

Business.
“We would also want (to invest) US$100 million per year in infrastructure. We really like infrastructure. It is a very good way of stimulation. We were the major source of funding for Zesa, Hwange, Ziscosteel (now NewZimsteel) and municipalities. It is not that we have money in our bank (account) but we have realised that we have potential to raise capital.”
Mr Ngwerume, who is set to leave the company end of this month, said the sectors that would be targeted include mining, agriculture, tourism and services.
Currently, Old Mutual’s investment in private companies is around US$80 million.
Its portfolio on the Zimbabwe Stock Exchange is about US$300 million, said Mr Ngwerume.
On the Distressed Industries and Marginalised Areas Fund, Mr Ngwerume said about US$14 million had been disbursed so far, and Bulawayo has received half of the funds.
He said the DiMAF was meant for struggling companies that have potential to turn around.
DiMAF was established as a solution to reverse the trend of company closures.
Government was supposed to contribute US$20 million to the fund, with Old Mutual chipping in with the other US$20 million.
On the Youth Fund, about US$1,6 million has been disbursed. Mr Ngwerume said a team of 10 professionals has since been set up to oversee implementation of the programme.
Old Mutual set up the US$10 million youth fund which is being administered by CABS as part of meeting its indigenisation and empowerment obligations. Mr Ngwerume said the fund was set after realisation of limited employment opportunities.
“The young people. . . they don’t have employment opportunities . . . but we have got to empower them. So two and a half percent (of the company’s shareholding) was donated to a trust and that is now being used as security to CABS. The collateral is the (businesses) idea, model and on that we can lend,” he said.
Mr Ngwerume said Old Mutual was fully committed to fully comply with the country’s indigenisation and empowerment laws.
The indigenisation requires foreign-owned companies to turn over at least 51 percent of their shareholding to locals.
“We are thinking (on how to fully comply) but I can assure you that the solution that we will come up with will be broad based,” said Mr Ngwerume.
“In the process, instead of making the cake smaller, we will make it larger. There are no two ways. It’s either we pack our bags but as long as we are here we will comply.”
On the state of the insurance industry, Mr Ngwerume said despite penetration levels being low as compared to the pre-hyperinflation environment, the upside potential is huge.
Commenting on prospects of the economy, he said Zimbabwe was poised for growth.