DIASPORA remittances tumbled 17 percent last year largely due to the depreciation of the South African Rand and a global economic slowdown, the RBZ has revealed.
In its monetary policy review statement for the period between July and December last year, the RBZ said overall remittances for 2016 topped US$1.5 billion, down from nearly $2bln the previous year.
More than a million Zimbabweans are estimated to have fled the country in the last decade and a half largely to escape an economic crisis blamed on President Robert Mugabe’s policies.
The exiles have however become a key source of foreign currency for the battered country as export performance remains constrained and industries struggle to be viable in an inclement environment.
Most of the exiles settled in neighbouring South Africa and Botswana with others settling further abroad in countries such as the Australia, Britain, Canada and the United States.
The RBZ said South Africa alone contributes some 34 percent of the remittance income.
A decline in the value of the Rand against the United States dollar – the currency of choice in Zimbabwe – necessarily hit remittances from the regional economic giant last year.
“The decline in Diaspora remittances is attributed to the poor performance of the global economy, the depreciation of the South African Rand (South Africa contributes about 34% of the total Diaspora remittances) and the increasing preference of the Diaspora to send remittances in kind and through informal channels.
“Of the total amount received in 2016, US$779.0 million reflects remittances from the Diaspora while remittances from International Organizations (NGOs) amounted to US$795.0 million,” the bank said in its statement Wednesday.
It added: “The introduction of Diaspora Remittance Incentive Scheme (DRIS) is expected to increase the remittances sent through formal channels.”
The scheme is intended to entice the diaspora to use formal channels to send money back home by reducing the cost of remittances into the country, one of the reasons –according to officials – remittances have dipped.
“Regrettably, it has not always been easy for Zimbabweans outside the country to send money home.
“Many have been forced to send via cross border buses and other risky and unreliable methods which resulted in many customers losing the money,” the bank’s exchange control director, Morris Mpofu told the media last year.Advertisement