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Diaspora remittance sustain Zimbabwe economy

by Thobekile Zhou
08 Dec 2016 at 17:37hrs | Views
Diaspora remittances to Zimbabwe have become the second highest source  of the country's liquidity after exports, constituting  about 30% of total external inflows, the 2017 national budget indicate.

"Remittances of non-residents have become the second largest source  of the country's liquidity, constituting  about 30% of total external inflows.

"In 2016, the financial system anticipates formal remittance receipts of  US$780 million, a 17% decline from US$935 million recorded in 2015, in  part reflecting the impact of the appreciation of the US dollar against the  other source currencies, particularly the South African rand" reads part of the budget statement outlined by Finance Minister Patrick Chinamasa.

Chinamasa said there is need to  further  ease  of transactions  to  allow  for  faster  and   less  costly  transfers  by  non-residents,  also  to  allow  for  accessible   opportunities  for  our  non-residents  to  undertake  domestic  investments  and participate in business ventures of their choice.

The reliance on remittances comes against the backdrop of waning disposable income due to unemployment and company closures.

Given the significance of the diaspora remittances, government is now exploring the option of issuing diaspora bonds to entice the diaspora community to inject more money into the economy.

Official diaspora remittances have been growing from $300 million in 2009 to more than $800 million in 2014.

In 2015 remittances from the diaspora were $935 million, which is more than what the country gets through foreign direct investment (FDI).

Source - Byo24News