RBZ to launch diaspora-backed securities

The Reserve Bank of Zimbabwe (RBZ) is preparing to introduce securitised financial instruments backed by diaspora remittances, a bold move aimed at unlocking over US$1 billion in annual inflows from Zimbabweans abroad and channelling them into the country's struggling capital markets.

The initiative forms part of broader financial sector reforms to deepen domestic capital markets, diversify funding sources, and support long-term economic recovery in the wake of decades of financial instability.

Securitisation involves transforming future cash flows-such as remittances-into tradable financial instruments, which are then sold to investors who receive returns based on the income stream. In Zimbabwe's case, the instruments will be structured around remittance flows, a lifeline for many families but largely consumed through short-term household expenditure.

In an exclusive interview with the Zimbabwe Independent on the sidelines of the African Development Bank's economic outlook event this week, RBZ deputy governor Innocent Matshe confirmed that the instruments were in the pipeline, although he withheld specific timelines or funding targets.

"These instruments will be announced as we introduce them so that we do not pre-empt the market," said Matshe. "But the idea is to achieve a broader base of capital in order to deepen our capital markets."

Matshe explained that Zimbabwe's shallow financial markets required innovative solutions, including tapping diaspora remittances for productive investment. The planned securities, he said, would be anchored on credit-rated international remittance flows, removing Zimbabwe's sovereign risk and offering a more stable investment platform.

"Not just remittances, but including remittances," he clarified. "We can structure these instruments with credit-worthy jurisdictions to attract capital at lower interest rates and reassure investors."

This approach echoes the early 2000s Homelink initiative under then RBZ governor Gideon Gono, which targeted diaspora funds for real estate investments. While that programme had mixed success, it provided a blueprint for using diaspora capital to stimulate domestic investment.

Zimbabwe receives between US$1 billion and US$1.5 billion annually in diaspora remittances, primarily from the United Kingdom, South Africa, and the United States. In February 2025, inflows rose 7.5% year-on-year to US$165 million, underlining the growing potential of this capital stream.

However, Matshe acknowledged that success would depend heavily on rebuilding trust in financial instruments and government-backed securities.

"If we restore trust, we can then tailor instruments that will be attractive to both domestic and international investors," he said.

That task, however, may prove challenging. Zimbabwe's Treasury Bills and other government debt instruments have a chequered past. Allegations of abuse, lack of transparency, and bypassing of parliamentary oversight have eroded market confidence, deterring investors and raising concerns about accountability.

Calls are also growing from within Zimbabwe's financial sector for the government to consider securitising mineral assets as an alternative funding mechanism.

Meanwhile, legal and civil society experts have urged reforms to Zimbabwe's laws governing media freedom and expression, arguing that vague statutes such as "undermining the authority of the President" are prone to abuse. The arrest and detention of NewsDay editor Faith Zaba, who described Zimbabwe as a "mafia state" in a column, sparked outrage and condemnation across the continent.

The Africa Editors Forum (TAEF) called for her "immediate and unconditional release," warning that the detention of journalists "undermines democratic institutions and erodes public trust."

As Zimbabwe eyes global capital and aims to position itself as an investment destination, analysts say that respect for human rights, transparency, and rule of law will be just as critical as financial innovation in attracting long-term investor confidence.