RBZ governor urges discipline on indigenisation

via New RBZ governor urges discipline on indigenisation | The Source  May 7, 2014

The new central bank governor, John Mangudya on Wednesday urged government to strike a balance between its indigenisation policy and promotion of foreign direct investment to revive the country’s ailing economy.

The law, which requires foreign companies cede 51 percent shares to  local blacks has been blamed for scaring away investors.

“The greatest panacea of our challenges is discipline…..enough to find an equilibrium position or a point of harmony between the need to promote indigenisation and the need for foreign direct investment and the ability to synchronise the two,” said Mangudya in his first statement after taking office on May 1.

He said there was also need for discipline in the utilisation of  the country’s resources, to increase production and to refrain from “living beyond our means, as this would bring greed and corruption.”

Mangudya said the past three years have been challenging for the economy and people as the period was characterised by high unemployment, liquidity challenges and dwindling tax revenues.

He cited low aggregate domestic demand, deterioration of the balance of payments support, banking sector vulnerabilities and low industry capacity utilisation as some of the challenges that needed to be addressed.

“The economy is weaker and the financial system is depressed. We need to be courageous and skilful to manage the situation on hand,” he said.

He called for the promotion of value addition and increased export earnings to enhance liquidity in the economy.

Mangudya took over from Gideon Gono, who headed the bank for decade until November last year when his term expired.