Zimbabwe's diaspora remittances hit US$800 million

ZIMBABWE'S diaspora remittances reached US$797 million in the first six months of the year, representing a 23 percent increase in the corresponding period last year.

An estimated three million Zimbabweans are believed to be in the diaspora and they regularly send money back home to sustain their families.

In his mid-term monetary policy statement presented last Thursday, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya said: "Of the total amount, diaspora remittances amounted to US$797 million, a 23 percent increase from US$650 million received during the same period in 2021."

Economic analysts have urged the Government to craft policies that attract Zimbabweans in the diaspora to channel their financial resources beyond domestic consumption as they have a key role in transforming the economy.

For instance, countries such as China and India offer different business-oriented incentive models that enlist diaspora contributions to development and such nations have succeeded in becoming among the leading world economies without reliance on foreign direct investment only.

Zimbabweans in the diaspora stand a chance to participate in different economic sectors as well as investing in capital markets, venture capital funds and pension funds and various bonds by the Government or the private players.

The country has a strong skilled and unskilled diaspora population largely in South Africa, the United Kingdom, United States, Australia, New Zealand, and Canada.

Dr Mangudya also highlighted that the country's international remittances received through the normal banking system on behalf of international organisations amounted to US$575 million, spiking by 24 percent from US$463 million recorded during the same period in 2021.

International remittances comprise transfers by Zimbabweans in the diaspora and international organisations.

"As at June 30, 2022 total international remittances amounted to US$1,372 billion, an increase of 23 percent from the US$1,113 billion recorded during the same period in 2021," said the central bank chief.

In the first half of the year, banks processed foreign payments amounting to US$3,78 billion representing a 19 percent jump in foreign payments from US$3,19 billion recorded during the corresponding period last year.

The increase in foreign payments was mainly due to improved global prices for fuel and electricity.

"Total foreign currency receipts for the period  January 1 to June 30, 2022 amounted to US$5,45 billion compared to US$4,07 billion received during the same period in 2021, representing a 33,6 percent increase.

"This shows a significant growth in receipts during the first half of the year," said Dr Mangudya.

Meanwhile, RBZ has approved US$70 million worth of Letter of Credit as part of a broader scope to mobilise foreign currency required for the importation of essential commodities such as raw materials, plant and equipment, wheat, fertilisers and agro-chemicals.

The monetary authority is also working with its local and external partners to unlock offshore lines of credit to support the country's foreign currency needs and Letter of Credit issuances under the AfreximBank US$150 million facility.

Bank facilities continued to bridge the balance of payments gap for the country through providing a critical liquidity lifeline to the local industry.

Letters of Credit worth about US$145 million were issued during the first seven months of this year.