SA migration crisis threatens remittances

South Africa, the source of nearly a third of Zimbabwe's diaspora remittances, has emerged as the biggest threat to the country's external inflows after a surge in anti-immigrant sentiment triggered the return of more than 108,000 Zimbabweans.

According to government figures, by July 18 a total of 33,855 Zimbabweans had been repatriated through government-assisted programmes, while an estimated 74,511 had returned independently, bringing the total number of returnees to more than 108,000.

The developments have prompted FBC Securities (FBCS) to identify the South African migration crisis as a major downside risk to Zimbabwe's external inflow outlook in its half-year economic report.

Drawing on Reserve Bank of Zimbabwe data, FBCS said South Africa contributed US$419.77 million, or 30.78%, of Zimbabwe's total diaspora remittances of US$1.36 billion during the first half of 2026. This made South Africa Zimbabwe's largest remittance source, ahead of the United Kingdom, which contributed US$387.19 million.

"The recent migration crisis in South Africa has introduced a new downside risk to Zimbabwe's external inflow outlook," FBCS said.

"Reports indicate that tens of thousands of Zimbabweans have returned from South Africa since late May 2026 following heightened anti-immigrant tensions, repatriation arrangements and increased pressure on undocumented migrants."

The brokerage noted that publicly reported returnees increased from about 60,000 in early July to nearly 100,000 by mid-July, with official estimates suggesting the figure could rise further if more Zimbabweans opt to return home.

"This development is economically significant because South Africa remains Zimbabwe's largest single remittance source in the H1 2026 data," the report said.

However, FBCS cautioned that the impact on remittance flows may not be immediate or proportionate.

"Many returnees may have been lower-income or irregularly employed workers with limited remitting capacity, while a meaningful portion of Zimbabwe's higher-value remittances may continue to come from more formally employed migrants who remain in South Africa, the United Kingdom, the United States, Australia, Canada and other developed markets," the report said.

The brokerage also suggested the crisis could temporarily boost remittance inflows as Zimbabweans still living abroad support relatives returning home, pay relocation costs or transfer precautionary savings.

"In addition, the crisis could temporarily lift remittances from migrants who remain abroad as they support returning relatives, finance relocation costs, or invest precautionary savings at home," FBCS said.

"This means headline remittances may hold up in the short term."

The greater concern, according to the report, lies in the medium term.

"If returnees are unable to reintegrate quickly into domestic employment, self-employment or productive enterprise, Zimbabwe could face a dual shock: lower future remittance inflows from South Africa and higher domestic demand for jobs, housing, schooling, health services and social protection," FBCS warned.

"This would place pressure on already constrained public services and could dampen household spending in remittance-dependent areas."

The report noted that the impact could be mitigated if returning migrants bring back skills, capital and business experience.

"Conversely, if returnees bring skills, savings, networks and business equipment, the shock could be partially converted into a domestic productive opportunity, especially in agriculture, construction, logistics, services and small enterprise development," FBCS said.

Using first-half remittance data, the brokerage estimated that a 10% decline in remittances from South Africa would reduce inflows by approximately US$42 million. A 20% decline would amount to about US$84 million, while a 30% drop would translate into losses of around US$126 million.

"While these figures are scenario estimates rather than forecasts, they illustrate that even a partial disruption to the South Africa corridor could be material for household liquidity and external-sector resilience," the report said.

FBCS recommended that authorities closely monitor remittance trends from South Africa by tracking monthly inflows, average transaction values, transaction volumes and the use of formal transfer channels to identify any deterioration early.

The brokerage also urged policymakers to identify sectors and regions most dependent on South African remittances, particularly education, retail, housing rentals, transport and informal trade.

It further recommended expanding access to low-cost digital and bank-linked remittance channels to encourage migrants to continue using formal transfer systems despite the migration disruption.

To maximise the potential benefits of returning migrants, FBCS said government should support the integration of returnees into small business financing, agriculture, construction, logistics and export-oriented industries.

The report also called for a broader diaspora engagement strategy aimed at strengthening remittance flows from markets such as the United Kingdom, the United States, Australia, Canada and Ireland.

An economist, who declined to be named, said the scale of the economic impact would ultimately depend on the profile of those returning.

"The concern is not that more than 108,000 Zimbabweans have returned, but whether those returning are the same people who were regularly sending money home," the economist said.

"The economic risk depends on how much income is lost, how many migrants remain employed in South Africa, and whether returnees are able to find productive employment in Zimbabwe. That will be the key factor."