Estimates from the Reserve Bank of Zimbabwe (RBZ) show that
as at October 30, 2020, Zimbabwe had registered a 48 percent jump in
remittances to US$760 million, from the prior comparable period.
This was largely due to increased use of formal channels,
amid national lockdowns and restrictions
implemented by countries due to Covid-19.
Central bank Governor Dr John Mangudya last month said
remittances were bringing in about US$90 million a month.
With US$760 million in remittances having come into the
country in the first 10 months of the year, a projected US$180 million between
November and December could take that figure to around US$940 million.
But the remittance figures could be higher for December as
is normally the trend during the festive season.
This is notwithstanding an earlier World Bank forecast that
in the wake of the Covid-19 economic crisis, remittance flows to Sub Saharan
Africa would fall by 23,1 percent.
For Zimbabwe, Diaspora remittances are a critical source of
foreign currency, along with exports of key products like gold, platinum group
metals and tobacco.
Last year, Diaspora remittances into the country grew by
2,6 percent to US$635 million from US$619 million recorded in 2018.
With many Zimbabweans based outside the country failing to
travel due to the pandemic, the use of formal channels has increased. And
providers of such services are leveraging on the new opportunities.
Said WorldRemit head of Sub Saharan Africa and country
director for Zimbabwe Pardon Mujakachi recently: “We are continuously looking
at how we respond to the increasing demand for our product in the diaspora and
innovate payout options for customers at home.
“The customer demand creates opportunity for growth and the
expansion of our footprint especially in the hard-to-reach areas of Zimbabwe.
Our aim is to ensure that everyone everywhere has access to our service”.
Zimbabwe is among the leading recipients of remittances in
the Comesa region alongside Egypt, Kenya, Tunisia and Democratic Republic of
Congo.
The country also leads in terms of contribution of
remittances to gross domestic product (GDP) at 13,5 percent, according to the
Comesa secretariat.
The increased inflows of remittances, coupled with the
relaxation of free funds usage has benefited the local economy, and this was
confirmed recently by the RBZ Governor.
“The liberalisation of free funds that was done through
Statutory Instrument 85 of 2020 has helped this economy significantly because
Zimbabwe is currently earning around US$150 million in cash on a monthly basis;
that is US$90 million from Diaspora remittances and about US$60 million that is
paid to artisanal gold miners on a monthly basis,” said Dr Mangudya.
“That cash is in this economy. And the best way for that
cash to come to the banks and to circulate was that we liberalise the use of
free funds so that the money comes into the banks, it circulates in the
economy, goes into the auction system and the economy goes forward.” Herald
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