Home » Industry » Old Mutual to Set Up Infrastructure Fund

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.

Source : The Herald