Diaspora remittances surge
ZIMBABWE’S central bank governor John Mangudya says official remittances from the diaspora were up
45 percent during the January- September period from 2019 at US$657,7 million as coronavirus (Covid-19) lockdowns forced people to send cash home via official channels.
Diaspora remittances are an important source of foreign exchange for Zimbabwe, which is in the grip of its worst economic crisis in more than a decade that has seen worsened dollar shortages.
Most of Zimbabwe’s more than two million-strong diaspora live in South Africa, and often send money via unofficial channels, including buses and trucks.
When Zimbabwe and South Africa closed their land borders as part of measures to contain the spread of coronavirus earlier in 2020, many Zimbabweans started to use money transfer agencies to send money to families back home.
“What this means is that money is now coming through the formal system. Therefore, it is also formalisation of the economy since Covid-19. This is fantastic news,” Mangudya told MPs in the capital Harare.
The diaspora remittances helped drive up foreign exchange inflows to $4,76bn during the January-September period, up from $4,22bn during the same period last year, said Mangudya.
Africa-focused money transfer firms have seen a boom despite predictions from the World Bank of a historic 20 percent drop to $445bn in remittances to poorer countries in 2020 due to the pandemic-induced economic
At the same meeting in Harare, Finance minister Mthuli Ncube reiterated that the economy was expected to grow by 7,4 percent in 2021 after contracting by 4,1 percent in 2020. He had previously projected a 4.5 percent contraction this year.