Remittances top US$900 million in six months

Diaspora remittances to Zimbabwe reached over US$900 million in the first six months of this year, translating to a 15 percent increase from last year’s figure.

Diaspora remittances continue to increase as Zimbabweans abroad are sending money back home to sponsor personal project as well as sustaining families.

At US$919 million in the first six months of the year, remittances have increased from around US$$797 million during the same duration in 2022.

Data from the Reserve Bank of Zimbabwe reflects that diaspora remittances are now ranked second in terms of Zimbabwe’s overall sources of foreign currency.

The remittances come as a boost to national development, with Zimbabwe targeting an overall growth rate of 5,3 percent by the end of the year.

Monetary authorities are expecting further growth in diaspora remittances from last year’s figure of 11 billion United States dollars, owing to increased confidence in productive sectors of the economy.

The increase in remittances has resulted in the scramble for the billion-dollar remittance industry with local and international fintech institutions vying for a share of the pie against legacy banks and traditional money transfer agencies.

It is a bet and nearly every finance institution in the country is coming up with remittance centers where they offer a boutique service for multiple remittance services. The country’s biggest bank, CBZ launched a CBZ Remittance unit to tap into this market.

The market is taking up a hybrid approach with other cash pick up remittance players such as Mama Money, Sendittoo and WorldRemit which, however, cut international transfers into bank accounts last week already active in Zimbabwe.

Economist, Tinevimbo Shava, said there is potential to double the income from remittances and move it from a welfare programme to investment.

He claimed that remittances as an industry are bigger than the agriculture and manufacturing sectors.

“The dollar earned in mining is encumbered. Meaning while revenue in mining is US$6,5 billion it comes with an equally huge cost of approximately US$4 billion inclusive of import costs.

The Reserve Bank of Zimbabwe has a Diaspora Desk within the Foreign Investment Department that has the responsibility of facilitating investments into the country from the Zimbabweans in the diaspora.

This facilitation role is done through provision of relevant investment information to the diaspora community, provision of investment opportunities available in the country, processing of investment proposals, answering queries as well as taking suggestions from the diaspora community.

However, the central bank has not shared any tangible information on how this desk is faring.-ebusinessweekly