Diaspora remittances rise 16% to US$823 mln in May
HARARE – People living outside Zimbabwe officially remitted to the country US$823.02 million in the five months to May, an increase of 16% over the comparable year ago period. This translates to US$5.14 million remittances a day over the period, a slightly lower average than what was achieved in the first quarter at US$5.43 million.
According to data availed by the Reserve Bank of Zimbabwe, diaspora remittances in the same year ago period were at US$707.11 million and have now grown 16%. This year, January and April were the strongest months because of holiday and back to school related expenses. In April, remittances grew 27% to US$169.07 million from US$133.37 million achieved in the same period last year. There was a slight dip in May to US$159.65 million. But year on year, the remittances grew 4% from US$153.73 million.
Last year, diaspora remittances grew 16% to US$1.62 billion. The total is forecast at about US$2 billion with total foreign currency receipts expected to close the year between US$12-13 billion boosted by improved merchandise exports. Government continues to underscore the significant economic impact of remittances on receiving households, communities, and the country as a whole. However, there are still to come up with policy direction on how the remittances can be used to foster economic development.
In its latest Migrant and Development report (June 2024), the World Bank says countries with significant remittance from the diaspora should leverage it to fight poverty and finance other needs in the country. Zimbabwe is in the top ten African countries with significant remittance flows.
“This is not to suggest that remittances could substitute for FDI or ODA. Developing countries need FDI, especially in critical infrastructure and green investments. They also need ODA to address public financing needs and externalities such as fragility and climate change. Instead, countries need to take note of the size and resilience of remittances and find ways to leverage these flows for poverty reduction, financing health and education, financial inclusion of households, and improving access to capital markets for state and non-state enterprises,” the World Bank report said.
According to NGO data, diaspora workers send on average US$200 to US$300 home every one to two months. This represents only 10-15% of what they earn.
The data also shows that outward remittances in the five month period were 78% higher to US$35.92 million. For May, outward remittances were US$7.18 million from US$4.04 million last year, an increase of 78%.-finx
