via Diaspora remittances overtake FDI – DailyNews Live • 20 December 2015
HARARE – Diaspora remittances to Zimbabwe have overtaken foreign direct investments (FDI) due to the country’s controversial economic policies that continue to push foreign investors away, latest data from Treasury shows.
Figures released by the Finance ministry this week revealed that Diaspora remittances in the 11 months to November this year increased by 97 percent to $966 million from $540 million recorded for the same period last year.
On the other hand, foreign direct investments in Zimbabwe in the 11 months stood at a paltry $566 million, compared to regional neighbours such as South Africa and Mozambique which received $10,8 billion and $4,9 billion investments.
This comes as findings of a report conducted by Centri, FinMark and United Nations Development Fund revealed that of the seven million adult Zimbabweans in the country, close to 61 percent were surviving on money sent home by the 3,3 million adult Zimbabweans living outside the country.
However, foreign direct investment inflows into the country have remained subdued, despite the fact that the country boasts of vast mineral resources such as gold, platinum, diamonds, tin and tungsten among others.
Government, however, believes the Diasporans have the potential to become an important class of investors and a vital economic component not only in resuscitating the ailing economy but in national development.
In his 2016 National Budget, Finance minister Patrick Chinamasa said Cabinet was working on adopting the country’s National Diaspora Policy which is set to encourage Zimbabweans in the Diaspora to invest back home.
It is also the policy’s thrust to ensure Zimbabweans outside the country make use of the expertise they would have gained over the years in other countries for economic development.
The policy will ensure effective participation of Zimbabweans outside the country in national development.
Unveiled in September, the policy will ensure that Zimbabweans receive remittances from the Diaspora to support the country’s productive sector.
The majority of Zimbabweans in the Diaspora left the country over a decade or so ago to escape a biting economic crisis characterised by world record inflation and high unemployment.
Given that some funds come into the country through informal channels, especially from Zimbabweans resident in neighbouring countries such as South Africa, Botswana, Mozambique, Zambia and Namibia, the contribution of the Diaspora to circulating cash may be much higher.
Several countries like Ethiopia, Mexico, China, India and the Philippines have benefited from their Diasporans for their economic development.
Ethiopia established formal mechanisms to encourage and facilitate Diaspora engagement and setting up specific departments which deal with Diasporans.
COMMENTS
How can government assert that they will channel remittences into productive use? Those remittences are made to family members so that they can eat and survive, because ZANU-PF has destroyed the formerly functioning national economy. Is government, aka ZANU-PF, now going to require a certain percentage of remittences not be used for personal needs, but instead be channeled toward some greater national purpose? What is the mechanism whereby this will be achieved? How will these funds be “unlocked?” That just sounds like more theft by ZANU-PF… sort of like the indigenization legislation! Just as that legislation seeks to destroy the concept of private property by getting all white and foreign businesses to relinquish 51% of their business – for no compensation – does this new effort also seek to force private citizens to relinquish 51% of their own family remittences to ZANU-PF too?