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Harare - Zimbabwe's central bank chief John Mangudya said the country needs to come up with
credible policies and fight negative perceptions to attract desperately
needed capital, as it battles economic crisis.
He called on the country to "fight the negative perception that Zimbabweans continue to create, knowingly or unknowingly, for ourselves".
"Investment inflows into Zimbabwe have remained
subdued due to the perceived country risk," Mangudya said in a monetary
policy statement.
READ: Zimbabwe economy takes another dive
Foreign investment in Zimbabwe more than halved in the first six months of the year, the central bank chief said on Monday.
The news came as Mugabe, Africa's oldest leader at 90 who held onto power in disputed national elections last year, kicked off a trip to China aimed at luring investment in the nation's stagnant economy.
READ: Zim seeks China's aid as Mugabe meets Xi
Mugabe has ruled Zimbabwe since 1980, his more than three decades in power starting amid optimism but eventually characterised by corruption, enduring economic crisis and brutal crackdowns against political opposition.In the face of Western opprobrium he adopted a "look East" policy, forging new ties and buttressing existing ones with east Asian countries, including China.
Once the breadbasket of southern African, the country now imports basic goods from neighbouring countries and is grappling with unemployment of around 80%.
Zimbabwe was forced to slash its growth forecast for the year from 6.1% to 3.1% due to weak economic activity.
Scared off by indigenisation
Investors have been scared off by Harare's controversial indigenisation law, which prohibits foreign companies from controlling foreign owned businesses. Earlier this year, Harare said it will amend the law.
"There is therefore need for the country to create an investor-friendly environment so as to tap into these external capital resources to boost employment, production and exports," he added.
The solution lies in "putting in place credible, consistent and predictable investment policies," Mangudya said.
Zimbabwe is in the throes of an economic crisis characterised by tight liquidity crunch, companies closures, non-performing loans and a "disproportionate trade balance," according to the bank governor.
"This subdued level of exports further compounds the liquidity situation and deceleration in economic activity," he said.
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