RBZ's to unlock over US$1 billion in remittances

In a bold move to revive Zimbabwe's struggling economy, the Reserve Bank of Zimbabwe (RBZ) has announced a plan to securitize diaspora remittances, aiming to transform predictable inflows into investable financial instruments. Unveiled in July 2025, the initiative seeks to unlock over US$1 billion annually by turning future remittance flows into tradable assets, which could attract both local and international investors.

This move comes as Zimbabwe continues to battle economic instability, with persistent inflation, limited foreign currency reserves, and a fragile investment climate. According to the RBZ, the plan would use credit-rated remittance flows as a foundation to reduce the country's sovereign risk, presenting a more secure investment option for potential backers. Deputy Governor Innocent Matshe, who is leading the initiative, said the strategy draws lessons from past efforts such as the early-2000s Homelink program, which encouraged diaspora investment in property but was ultimately undermined by poor execution and governance issues.

Zimbabwe's diaspora, particularly in South Africa, has become a critical economic lifeline. Migrants send billions home each year to support families, fund education, and cover healthcare costs. In the first half of 2025 alone, Zimbabwe received US$1.09 billion in diaspora remittances, reflecting an 8.4% increase compared to the same period in 2024. In February 2025, inflows rose 7.5% year-on-year to US$165 million, underscoring the diaspora's growing economic influence. A significant portion of these funds come from Zimbabweans in South Africa, where the majority of the diaspora resides due to geographic proximity and historic migration trends.

The RBZ's securitization plan, if executed properly, could streamline remittance flows, reduce transaction costs, and allow for the funds to be directed into key sectors such as mining and manufacturing. However, a long history of financial mismanagement and lack of transparency by Zimbabwean institutions has left many diaspora members skeptical. Past experiences with government-issued securities, including Treasury Bills and savings bonds, have been marred by delays, defaults, and accusations of corruption.

This trust deficit poses a serious threat to the success of the securitization strategy. Many Zimbabweans abroad remain wary of channeling their hard-earned money through formal state-linked structures. While the RBZ hopes to present the new instruments as safe and transparent, convincing the diaspora to participate will require more than promises. It will demand demonstrable changes in governance, regular disclosures, third-party oversight, and consistent engagement with diaspora communities.

Zimbabwean migrants in South Africa also face increasing socio-economic pressures. Xenophobic violence, tightening immigration policies, limited access to public services, and South Africa's own economic slowdown have placed additional burdens on migrants. Many work in informal or low-wage sectors such as construction, domestic work, and hospitality, leaving little room for financial flexibility. These conditions could reduce remittance volumes and challenge the RBZ's assumption of stable, long-term inflows.

Nonetheless, the central bank insists the securitization plan could be a game-changer. By creating instruments backed by consistent remittance flows, Zimbabwe hopes to stabilize its external accounts, attract private investment, and reduce reliance on short-term loans. Officials argue that the initiative is not only about financial returns, but also about rebuilding bridges between Zimbabwe and its diaspora, who for decades have sustained households and propped up the economy through remittances.

For the plan to work, the RBZ will need to commit to transparency, build public confidence, and work closely with diaspora communities to address their concerns. It must also ensure that remitted funds are used effectively and visibly in development projects, which could further motivate participation.

For Zimbabwean migrants in South Africa, the securitization plan represents both a potential opportunity and a familiar risk. If properly managed, their remittances could help rebuild their homeland and unlock personal investment benefits. But without systemic reform, the initiative risks becoming another short-lived financial experiment in a country that can no longer afford economic missteps.

As Zimbabwe navigates this critical juncture, the success of the RBZ's plan will largely depend on whether it can finally earn the trust of its diaspora — and prove that this time, their contributions will not be in vain.