Tuesday, 25 March 2025

DIASPORA REMITTANCES UP

Diaspora remittances grew by 7,5 percent to US$165 million in February this year, up from US$153,8 million in the same month last year, remaining a key source of foreign currency inflows supporting the economy.

The remittances come from a large pool of Zimbabweans living and working outside the country, including South Africa, the United Kingdom, the United States, Australia, Canada and the United Arab Emirates.

Diaspora remittances are crucial for the economic and social well-being of countries of origin, acting as a lifeline for families and communities, and contributing significantly to development by supporting basic needs, education, healthcare and even investments in agriculture and businesses.

In Zimbabwe, remittances continue to offer a reliable source of extra income to millions of local people who depend on their migrant relatives for financial aid back home while at the same time ensuring that inflows of foreign currency are greater than outflows, even when imports outnumber exports.

Typically, remittances are sent to support ordinary living expenses, education, housing development, healthcare and investments in businesses, among other critical uses.

The inflows provide significant liquidity to power various key sectors of the economy, at a time when Zimbabwe has limited access to concessional funding from multilateral lenders like the International Monetary Fund and the World Bank.

Decades-long western sanctions also mean Zimbabwe has for long been excluded from many global sources of funding needed to support key development programmes, including loans to individuals.

As such, the inflows are critical in boosting consumer aggregate demand in the domestic economy and driving industrial activity.

Less than 2 million Zimbabweans live in the Diaspora, with South Africa being the most popular destination.

A Zimbabwe National Statistics Agency’s (ZimStats) 2022 census states that about 908,913 Zimbabwean migrants live and work in South Africa, while 47 928 are domiciled in Botswana, 23 166 in the United Kingdom (UK), and the rest are spread around the globe.

Recent data from the UK Office of National Statistics shows that there has been a notable increase in the number of Zimbabweans who were granted UK skilled work visas since 2019.

According to the Reserve Bank of Zimbabwe (RBZ), Diaspora remittances have consistently played a vital role in bolstering the country’s economy, contributing significantly to the nation’s total foreign currency inflows.

“In February 2025, Zimbabwe’s Diaspora remittances grew by 7,5 percent year-on-year, totalling US$165 million, up from US$153,8 million in February 2024.

“The diaspora remittances have continuously supported the economy, accounting for 17 percent of the total foreign currency receipts,” said RBZ in its monthly statistics.

Last year, Zimbabwe witnessed a significant surge in diaspora remittances, with inflows reaching a record US$2,2 billion, representing a 22 percent increase from the US$1,8 billion recorded in 2023.

The diaspora represents a huge growth opportunity for the country, including bridging the huge gap in infrastructure financing, while the inflows can be tapped to fundraise for other development obligations through issuing diaspora bonds.

Beyond their valuable contribution to the well-being of individual households, another dimension of their positive impact on the country’s economy includes helping to stabilise the foreign exchange market, which is critical to support economic growth.

The central bank says it will continue to explore incentives to boost the diaspora remittance inflows, given the importance of remittances in the economy.

As the Government continues to implement policies to support the diaspora community and promote economic growth, diaspora remittances will remain a vital source of foreign exchange to propel economic growth. Herald

0 comments:

Post a Comment