via Old Mutual to set up infrastructure fund | The Herald 21 July 2014 by Conrad Mwanawashe
OLD Mutual is setting up infrastructure and agriculture funds to support fiscal activity as the group sees economic rebound in the country, an official has said.
Group chief executive officer Mr Jonas Mushosho said the insurance group’s major pre-occupation is to focus on how to improve economic performance.
“We have identified various areas in the economy where we can encourage economic revival by setting up a number of funds to support and stimulate economic revival in the long term. We are also looking at setting up an infrastructure fund and an agriculture fund to support economic activity,” said Mr Mushosho.
He said although the economy has been facing challenges including the liquidity crunch that has slowed down activity, Mr Mushosho said his group believes Zimbabwe will turn around in the future.
“The rest of the economy is not performing well and Old Mutual’s fortunes are dependent on the fortunes of the whole economy. We are invested in many companies on the stock exchange and you are aware that capacity utilisation has declined and aggregate demand is down,” he said.
“Therefore if the companies which we are invested in are not performing well our own performance is affected. But we are very hopeful because we always look at the long term. In the long term we believe that the economy will come back and when it does our own fortunes will improve.”
Government and Old Mutual set up the $40 million Distressed and Marginalised Areas Fund to shore up capital expenditure for companies whose performance had declined due to low aggregate demand and declining capacity utilisation.
Old Mutual also set up a youth fund whose purpose is to help the youth start their own projects and hopefully create employment.
The company has also set up an SMEs fund having recognised that the corporate sector as it is currently constituted may not be the engine driver of the economy into the future.
“We believe that the informal sector and the SMEs will be the driver of economic activity into the future so we set up an SMEs fund,” said Mr Mushosho.
The group has two major projects in Harare in Budiriro and Hatcliffe under its housing fund with the objective of providing 15 000 housing units across Zimbabwe over the next five years at a cost of $62 million.
“We are going to add 4 000 houses to the housing stock in Harare. We have not had major housing developments in the country for many years,” said Mr Mushosho.
CABS, an Old Mutual group company, is administering the housing project with the houses costing between $22 000 and $27 000 per unit. A 25 percent deposit is required per unit.
Government projects the construction sector to grow by 11 percent this year driven by public and private housing projects, on-going Government’s infrastructure projects and also from the expected positive growth in other sectors such as mining, manufacturing and agriculture.
“Treasury will facilitate the mobilisation of resources for the purpose of planning, surveying and servicing of land for the development of housing stands,” Finance and Economic Development Minister Patrick Chinamasa said in his 2014 National Budget statement.
To date, 1 748 stands and 288 units have been availed to the public as part of the broad National Housing Development Programme.
COMMENTS
Old Mutual have been known for developing buildings and not roads or related transport/communication support structures. Infrastructure development is sorely needed in Zimbabwe. Would Old Mutual add these needs to its proposed infrastructure Fund? If they are serious about their objectives and their achievement, then we will definitely see remarkable transformation in Zimbabwe. They have been strong players in the development arena and have used their building projects as investment opportunities and now they need the support of local authorities and government,in particular in developing roads and associated transport structures to their list of investments.
I think Old Mutual are a bunch of crooks. When I bought my house in 1988 (when the Zim dollar was still worth something) I took out a pension policy with them for Z$450/month for 15 years. After the 2002 ”NO” vote and the ensuing chaos, plus the farmers’ crisis, my business, like so many others, folded. I had no means of supporting myself and took the very hard decision to leave. I had less than a year to reach my 15 years of monthly payments to Old Mutual and asked if I could pay the outstanding amount (only about Z$5000)in one go so as to secure my pension. The answer was a resounding NO! I had no-one I could entrust to complete the payments for me so I lost all the money I had paid to Old Mutual over 14 years and, of course, also never got my pension.
OLD MUTUAL and indeed all of these thieving insurance companies that took our money over all the years we paid and gave ZERO back to us should be ASHAMED.
Using OUR MONEY to enrich themselves again.
WE PENSIONERS stress monthly and get nothing, all our savings were stolen either by Mugarbage or by the insurance companies, who by the way INSURED THEMSELVES off shore against the Inflation that happened and all our money remains off shore emableing them to do these kind of PROJECTS. GIVE US OUR MONEY FIRST.
I agree that Old Mutual should honour their obligations to pensioners after all they contacted us in the 1970’s and begged us to pay into a pension policy with no life benefits and it must be paid up to maturity this was done and when the time came to pay it out Old Mutual blamed it on the collapse of the Zimbabwe dollar. So if they cant pay the pension where has all this money come from now they claim to be broke