Zim diaspora remittances jump 33 % as lockdown forces use of formal channels

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By Alois Vinga

ZIMBABWE’s diaspora remittances continue to increase when compared to yesteryears despite earlier predictions of a sharp decline primarily due to hardships presented by Covid-19.

Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya told the media Thursday, there was in fact an increase in remittances in between January and June.

“Foreign currency sent into Zimbabwe between January and June 2020 amounted to US$466.2 million, up from US$347.9 million recorded during a comparative period in the previous year.

“So, this is a 33.3 % increase coming at a time when expectations are that remittance must be decreasing,” he said.

The development contradicts predictions by global financier, World Bank indicating that the country’s remittances would be affected by the Covid-19 pandemic and problems affecting Zimbabweans in host countries.

Several other Business Member Organisations also made similar predictions which hinted on acute foreign currency shortages for a nation that partly relies on remittances to meet its foreign currency needs.

Said Mangudya, “So, these are the trends which prompted the enactment of Statutory Instrument 85 of 2020 which permits the selling of goods and services in foreign currency.

“We cannot bar trade in the US dollars because these are free funds which have to be used as such.”

Market watchers believe that the increases in diaspora remittances could be a result of the Covid-19 pandemic’s impact on informal channels of sending money to Zimbabwe which were used before the pandemic’s outbreak.

These included sending the foreign currency through truckers, friends travelling back home or stashing the cash inside compatible goods in transit.

The central bank governor also said there has been a gradual and consistent growth of foreign currency deposits against a background of the stability being achieved by the Foreign Exchange Auction system.

“In January 2020 total foreign currency deposits stood at US$840 million but as of last week, such deposits had risen to US$1.1 billion,” he said.