Diaspora remittances down 12,5 percent to US$704 million in year to November

Source: Diaspora remittances down 12,5 percent to US$704 million in year to November | The Financial Gazette December 28, 2016

CUMULATIVE diaspora remittances have decreased by 12,5 percent to US$704 million  as at November 25 2016 compared to US$842 million realised during same period last year mainly as a result of the strengthening US dollar.
Acting senior division chief, exchange control at Reserve Bank of Zimbabwe, Farai Masendu told FinX that the major source markets were South Africa which contributed 34 percent to the total diaspora remittances, United Kingdom, America, Botswana, and Canada.

“As at 25  November 2016 cumulative inward money  transfer from the diaspora  amounted to US$705 million, a decreased  of about 12,5 percent compared to US$842 million  realised during the same period  in 2015 mainly as a result of strengthening US dollar mainly as a result of a strengthening US dollar. The major source markets are South Africa (34  percent), United Kingdom (23  percent), America ( seven percent), Botswana (three pecent) and Canada (one percent),” he said.

Government recently launched the diaspora policy and has been visiting the diaspora in an effort to engage and consult with the diaspora.

This engagement is also meant to identify economic areas which the diaspora (UK Canada and South Africa) could be interested in making investments in and the possibility of issuing a diaspora bond in the future.

This year’s remittances were anticipated to be in excess of US$900 million. Masendu however said statistics predict that diaspora remittances will be slightly below the 900 million that was anticipated this year.

“South Africa which is the main source market has moderately increased in volumes, but the value have decreased in tandem with the rate between the South African rand to the United States dollar,”  he said.

The other factor is that the global economy was sluggish and according to the World Bank, remittances in developing countries in 2016 are going to have marginal increase.

Masendu said diaspora remittances have consistently overshadowed Foreign Direct Investment in Zimbabwe since 2009 and the trend is expected to persist in 2016.

“FDI in 2015 was about US$421 million which is 45 percent diaspora remittances realised in the year. The trend is expected to persist in 2016,”he said.