The Zimbabwe Investment Authority (ZIA) says the number of investment applications it receives has fallen by about 70 per cent so far this year as investors take a cautious approach because of negative developments in the mining sector.

Last year, the country received a record 3.1 billion US dollars worth of investment applications although the investments actually made were estimated at around 500 million USD.

ZIA chairman Nigel Chanakira told the Parliamentary Committee on Youth, Indigenization and Economic Empowerment here Thursday that cancellation of licences for diamond mining companies by the government early this year as well as confusion around the implementation of laws to increase the involvement of indigenous people in the economy appeared to have scared away investors.

"As a result, we are 70 per cent down in terms of the investment traffic we would normally have," he told the committee, which is chaired by the Member of Parliament for Gokwe-Nembudziya, Justice Mayor Wadyajena.

The Zimbabwe government ordered mining firms which were operating in the Chiadzwa area of Marange in Manicaland Province to cease operations after they resisted proposals to merge them into one entity, the Zimbabwe Consolidated Diamond Mining Company.

This was after revelations that the country could have lost potential revenue of up to 13 billion USD through leakages during the time the seven companies were operating as individuals entities.

An investigation into the suspicions is currently underway.

Chanakira who was making a presentation on what the ZIA was doing to help improve the "ease of doing business", said following the development, there was a "caution and slow down" on the part of investors in the mining sector, which normally drives the overall tally for investment applications.

He said it was imperative that the government finalised issues around empowerment quotas and credits as officials were not sure how these were being implemented. "Foreign investors prefer well laid down procedures with regards to empowerment credits," he said.

Chanakira said it was critical for Parliament to fast tract amendments to the country's laws that are connected to investment. More than eight laws, including the Companies and Deeds Act, Small

Claims Act, Estate Administration Act, Commercial Court Act and the Shop Licensing Act required immediate attention, he said.

Quizzed on the impact of corruption on investment, Chanakira said "corruption has become a public embarrassment for the country." The fact that investors now viewed Zimbabwe as a corrupt nation was disadvantageous to the economy, he added.

Chanakira, however, emphasized that not a single case of corruption had so far been filed against officials at ZIA.