Source: Diaspora, NGO remittances decline 16 percent | The Herald May 25, 2016
Remittances into Zimbabwe fell 16 percent in the first quarter to $192,9 million against $231,4 million recorded in the same period a year ago. Remittances consist of both Diaspora and Non-Governmental Organisations flows. According to the Ministry of Finance, the slowdown is attributed to slow recovery in global and regional economic activity while the stronger US dollar also meant that remittances from countries such as South Africa would have a much lower value if converted.
In January, remittances stood at $62,9 million only to drop slightly to $62,92 million in February.
In March, there was an increase of 7 percent on the previous month to $67,41 million.
Remittances however, continue to be one of the main sources of net financial flows not only in Zimbabwe but in Africa.
Foreign Direct Investment also remains subdued with the latest available figures showing that the inflows into the country declined to $399 million.
Meanwhile according to the African Development Bank’s Economic Outlook released yesterday, in 2015, net financial flows to the continent were estimated at $208 billion, 1,8 percent lower than in 2014.
The total sum is projected to rise again to $226,5 billion in 2016. In the period, official development assistance rose, but stability in remittances continued to be the main contributing source of Africa’s net financial flows.
Sovereign bond issuances rose despite higher interest rates, reflecting general resource starvation among issuing countries. However, direct foreign investment in the oil and metals sectors dropped, as the extractive sector was buffeted by falling commodity prices.
Net portfolio equity and commercial bank credit flows dried up, reflecting tight global liquidity conditions and faltering market sentiment.
In the wake of slowing growth in large emerging economies, bilateral trade credit suffered as well.
Foreign investment into Africa increased by 16 percent from to $57,5 billion in 2015, according to IMF figures.
Flows to North Africa reversed a downward trend, as investment increased by 20 percent from $17,2 billion in 2014 to $20,7 billion in 2015.
East Africa has seen higher FDI since 2010. In 2015, the figure rose 16 percent to $ 8,9 billion in 2015 from $7,7 billion the previous year.
For West Africa investment rose from $9,3 billion to $9,7 billion.
Central Africa saw a decline from $6,6 billion in 2014 to $5,4 billion.
Southern Africa received $ 12,9 billion of FDI in 2015 against $8,7 billion in 2014, and $ 11,4 billion in 2013.
The leading African investment destinations in 2015 were: Egypt ($10,2 billion), Mozambique ($4,7 billion), Morocco ($4,2 billion), South Africa ($3,6 billion), Ghana ($2,5 billion), the Democratic Republic of the Congo ($2,5 billion), Zambia ($2,4 billion), Tanzania ($2,3 billion), Ethiopia ($2,1 billion), Guinea ($1,9 billion), and Kenya ($1,9 billion).
Africa has attracted foreign investment from many countries, notably from the United Kingdom, France, the US, and from the emerging economies China, India, South Africa, and the United Arab Emirates. – Wires.
COMMENTS
As the Zimbabwe situation continues to unfold one hopes that the government realizes that as its diaspora citizens spend longer and longer abroad, the connection to their original homeland will thin. New families form, and new connections and responsibilities grow in their new found homes. As the years drag on with no effort to produce a socially and economically secure society in Zimbabwe there will in time be less and less money that flows back as people do in the end move on. The remittances are unfortunately a curse in disguise in the face of no real change in the country as a whole. Once the families of those in the diaspora back home have either passed on, or come of age and able to move or provide for themselves, there will be no need to send money back to Zimbabwe.
Remittances need to be reduced further to get rid of Zimbabwe’s chief parasite – Zanu itself.