Driving Local Growth: Benedict Mbanga on Mangwana Capital’s Vision for Zimbabwe’s Economic Expansion

In this interview, Benedict Mbanga delves into Mangwana Capital’s distinctive edge in Zimbabwe’s private equity landscape, standing out as a locally funded entity amidst a predominantly foreign-funded market, drawing support from 48 local pension funds. Their strategic focus on agriculture, mining, and tourism underscores their commitment to bolstering Zimbabwe’s primary industries. With successes such as pioneering investments in horticulture and significant strides in the oil and gas sector through the Invictus project, Mangwana Capital continues to spearhead transformative ventures poised to redefine Zimbabwe’s economic landscape.

Interview with Benedict Mbanga, Co-Founder and Managing Director of Mangwana Capital

What is Mangwana Capital’s competitive advantage and how do you distinguish yourself from the competition? 

I would say Mangwana Capital’s competitive advantage lies in being one of the few locally funded private equity funds in this market, with most others being foreign funded. Our proposition stands out because we are backed by local pension funds and we invest in both local currency and US dollars into key sectors of the Zimbabwean economy, namely agriculture, mining, and tourism. There are very few players in this specific space, and in fact, we may be the only ones focusing on these primary sectors. While there are asset managers involved in alternative investments, our focus on agriculture, mining, and primary sectors sets us apart. We have about 48 local pension funds invested with us, seeking exposure to these alternative investments. All our investors are local at this point in time.

Let’s discuss your investment strategy in light of Zimbabwe’s current economic climate. How are you navigating your investments in the country?

Our investment strategy remains focused on the primary sectors of the economy. We are particularly committed to leveraging the US dollar for our investments, which includes exporting businesses that offer long-term hedging opportunities. Our value proposition remains strong despite currency fluctuations, as we actively deploy both local and US dollar currencies into tangible assets. We are optimistic about our strategy, especially given the current economic landscape. There has been notable growth in agriculture, increased Foreign Direct Investment in mining, and positive developments in tourism. These sectors continue to present promising opportunities for us.

Could you share some of your success stories and the impact you have had on local businesses or sectors you have mentioned?

We have achieved significant success across our diverse portfolio. For instance, we have supported the growth of horticulture businesses, including one of the largest pecan farms in the country, which initially was not popular in this region. We have also invested in major farming conglomerates involved in avocados and citrus, employing a hub and spoke approach to empower smallholder farmers around these ventures. Moving forward, our focus remains on enhancing agricultural value chains, particularly in processing, infrastructure, and logistics. This strategy aims to increase participation of smallholder farmers in lucrative sectors like horticulture.

Additionally, we successfully backed the Invictus project, Zimbabwe’s first exploration into oil and gas. Through this initiative, we have drilled two wells and discovered gas reserves, marking a significant milestone towards establishing a local oil and gas industry. These endeavors represent transformative achievements previously unseen in the country.

Could you elaborate on the Invictus project?

The Invictus project primarily involves drilling for gas in the Lower Zambezi region of Zimbabwe. We have successfully completed drilling two wells to date. Our next steps include expanding the gas field through long-term development initiatives. We are currently conducting feasibility studies as part of this effort. Additionally, Invictus is exploring pilot projects to begin monetizing the gas from this field, potentially supplying nearby mining operations and other entities. It is an exciting project gaining momentum.

Currently, our main focus is on this project. We are actively engaged in a capital raise aimed at involving local pension funds in this initiative. This strategic effort, known as a local capital strategic raise, is ongoing and aims to foster broader participation from local institutional investors and individuals in what we believe will be a transformative project for the country. We are also exploring the possibility of listing this project on the Victoria Falls Exchange, which would facilitate local investor participation in this significant endeavor with potential national impact.

You mentioned value addition in agriculture; could you outline other areas where potential investors might find opportunities?

Zimbabwe offers abundant opportunities, especially in agriculture due to its favorable climate, excellent soils, and vast underutilized land. We are seeing increased interest in crops like blueberries, which thrive in Zimbabwe’s climate and produce high-quality yields.

Additionally, there are promising prospects in horticulture such as avocados and citrus. The availability of water and fertile soils further enhance these opportunities, coupled with Zimbabwe’s strong human capital base, which supports the success of agricultural ventures.

On the mining front, there are significant opportunities in what is known as the Green Metals Space, particularly minerals essential for battery technology like lithium and nickel. These minerals are abundant across the country, and there has been a notable resurgence in mining activities focused on these resources. This sector holds immense potential for growth and investment, benefiting both foreign investors and the local communities involved in these projects.

I would like to highlight tourism as another significant area of interest for us. Zimbabwe boasts exceptional tourist sites such as Lake Kariba and Victoria Falls, which attract a substantial number of international visitors. Recently, we have been exploring investments in tourism, and since the COVID-19 pandemic, we have observed an uptick in visitor numbers and new airline routes connecting to these major attractions. Victoria Falls, in particular, stands out as a world-class tourism destination with considerable potential for international investment. It is an area we are enthusiastic about and currently exploring opportunities within.

Regarding the agriculture sector, given the favorable conditions for blueberries, could strawberries also be successfully grown?

Absolutely, strawberries and even raspberries thrive in our excellent horticultural climate. Zimbabwe’s geographical position near the equator ensures favorable growing conditions, allowing our produce to reach markets early, particularly for our European exports. Historically, Zimbabwe has also been successful in flower cultivation, with ongoing exports to destinations like the Netherlands through our operations. The combination of favorable climate, skilled workforce, and convenient access to mining and agricultural sites presents abundant opportunities across various sectors here.

Besides flowers, what other crops does your export portfolio include?

We export a diverse range of horticultural products including peas, peppers, macadamia nuts, and citrus. Our export portfolio is quite extensive and continues to grow, particularly in high-value crops. While staple crops like maize and wheat remain essential for food security, many farmers are diversifying into horticulture to capitalize on higher returns. Tobacco production also plays a significant role, with Zimbabwe being a major producer in Africa. Additionally, cotton is another substantial export crop for us, and we have investments in value-added processing facilities for cotton products, highlighting the considerable opportunities in our agricultural sector.

Could you outline your vision for Mangwana Capital for the next three to five years? What are your priorities and focus during this period?

Our aspiration is to continue raising capital, both locally and internationally. We aim to establish a hybrid model where international investors can partner with our local pension funds to invest in lucrative opportunities in Zimbabwe. This approach not only increases capital availability but also helps mitigate risks for international investors by partnering with local institutions that understand the local environment and can assist with risk management. We believe local institutions make excellent partners for foreign investors due to their capital base and local expertise. Looking ahead, sectors like agriculture and mining offer abundant investment opportunities that have been underfunded for some time, presenting ideal prospects for foreign investors to participate.

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