Financial services giant Old Mutual said this week up to US$84 million of its funds were trapped in Zimbabwe, largely comprising unrepatriated dividends.
The firm’s local subsidiary, Old Mutual Zimbabwe (OMZ), is now engaging authorities to resolve the issue, businessdigest has learnt.
The group recently said it would continue ring-fencing the Zimbabwean unit, citing its inability to repatriate funds. As a result, Old Mutual continues to exclude OMZ’s performance from its adjusted headline earnings.
OMZ remains Zimbabwe’s largest asset manager, with a portfolio valued at US$1,34 billion as of 2025. The group’s investments and securities rose to the equivalent of US$711,62 million, up nearly 28% from 2024, underlining its continued participation in the domestic economy.
“We have been able to service those (dividends), and this has been supported by the cash that we are generating and the way that we have also generated some of that cash in foreign currency,” OMZ chief executive officer Samuel Matsekete told businessdigest.
“So, there hasn’t been a lot of hurdles in terms of current commitments that we have needed to service. What might have been quoted in the reports referring to Old Mutual Limited is the legacy amounts.
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“We are amongst businesses that carried obligations that became part of blocked funds in our history over the period that we faced challenges in terms of remittances outside the country. So, we do have amounts that we also still need to remit.”
Matsekete said clearing the backlog would require coordinated support from policymakers.
“I think in our financial statements you would see us disclose amounts of up to US$83,8 million, which is part of legacy debt amounts,” he said.
“We continue to explore ways that it could be serviced, and obviously you will understand that this is something that will involve policymakers as well, in terms of some of the support required to see how we can sustain the commitments into the future and deal with those legacy debts.”
According to OMZ’s financial statements for the year ended December 31, 2025, the issue dates back to June 24, 2019, when government introduced Statutory Instrument 142, followed by the Reserve Bank of Zimbabwe (RBZ)’s Exchange Control Directive RU/102 of 2019. These measures required authorised dealers to transfer Zimbabwe dollar balances to the central bank at an exchange rate of ZWL1:US$1 for foreign currency legacy debts.
The US$84 million was recognised as legacy debt in OMZ’s latest financial statements.
“Upon transferring local funds for the registration of legacy debts/blocked funds, a legitimate expectation to receive a cashflow to allow for settlement of the registered obligation was created and an asset continues to be recognised on the group’s statement of financial position for the statutory receivable,” OMZ said.
“This asset has been valued on the assumption that a right to acquire an amount equivalent to the debt registered at a future date now exists. The carrying value of the financial instrument reflects management’s assessment of the present value of the expected net cashflows to be received under this arrangement.”
The Finance Act No. 7 of 2021 later provided for government to assume responsibility for settling registered blocked funds on the RBZ’s balance sheet.
“The mode of discharge of the blocked funds, was to be through the issuance of zero-coupon US-dollar denominated bonds with a provision for other detailed terms and conditions to be determined by the minister of Finance and Economic Development,” OMZ said.
The blocked funds resulted in an impairment loss of US$10,14 million last year, up 35% from 2024. This came despite OMZ posting profit after tax of ZiG1,04 billion, a 43% increase, driven by new ventures and growth in life assurance, banking, lending and O’mari.
Total assets rose 21% to ZiG46,44 billion, supported mainly by higher investments and securities, including holdings in listed and unlisted entities.