Zimbabwe Central Bank Seeks Foreign Investment

Zimbabwe Central Bank Seeks Foreign Investment

From Reuters

Zimbabwe’s new central bank governor said on Wednesday the government should balance its black economic empowerment drive with the need to attract foreign investment to boost the economy.

In his first statement since taking up his post on May 1, John Mangudya conceded that “the Reserve Bank has no tools at the moment to influence the economy directly”.

But his comments came only a few weeks after the finance minister gave banks a temporary exemption from the requirement to be majority-owned by black Zimbabweans.

The International Monetary Fund, local business leaders and investors themselves point to veteran president Robert Mugabe’s black empowerment policy, known locally as “indigenisation”, as an obstacle to foreign investment.

In his statement, Mangudya called for “discipline enough to find an equilibrium position … between the need to promote indigenisation and the need for foreign direct investment and the ability to synchronise the two”.

The government has projected 6.4 percent growth this year, but the World Bank expects 3.0 percent at best from an economy afflicted by lack of capital and investment, while company closures and job losses shrink the tax base.

Read more at Reuters