RBZ in road shows to drive remittances

THE Reserve Bank of Zimbabwe (RBZ) is on a campaign trail to entice Zimbabweans living outside the country transfer money through formal channels to boost remittances critical in the development of the economy.

Source: RBZ in road shows to drive remittances – NewsDay Zimbabwe September 22, 2016

BY TATIRA ZWINOIRA

The road shows come on the back of a 13% decline in remittances in the first half of the year to $397,3 million. In the same period last year, remittances through official channels were $457,9 million.

Speaking at the official signing of the partnership between Econet Zimbabwe and Mukuru Money Transfer yesterday in Harare, RBZ director of exchange control Morris Mpofu said they were visiting countries where the bulk of Zimbabweans live.

“Just yesterday, I came from a remittances mission. We had gone to engage the diaspora with the ministry of Macro-Economic Planning and Investment Promotion at the University of East London. We met quite a number of Zimbabweans who showed keen interest to use formal systems. Now, they have gone to Canada, while next week they will be in South Africa,” Mpofu said.

“Remittances are a major source of liquidity in the country. We have through our formal systems as the Reserve Bank accounted for $1 billion last year that came from the diaspora through cash-to-cash and hand-to-hand remittances.”

Mpofu said RBZ research showed that $1 billion was coming through informal systems “so we can see how big the market is and the potential that is there.

“It is this $1 billion that is coming through other systems that we want to come through formal systems,” he said.

Mpofu said remittances were the second biggest source of liquidity into the country after exports.

RBZ is working in close collaboration with the ministries of Finance and Macro-Economic and Investment Promotion and have crafted policies to drive remittances through formal channels.

Last week, RBZ extended the export incentive scheme to between 2,5% and 5% to diaspora remittances in a move to incentivise diasporans to send money. It will include any form of private unrequited transfers on funds remitted to Zimbabwe through normal banking channels with effect from October 1 next month.

Remittance companies have witnessed a decline in business over the past six months due to a lack of trust as some recipients have struggled to cash out money sent due to the current liquidity constraints.

The campaign comes as result of weak exports, the major source of liquidity, as the cash crisis continues with a recent ease of the shortages being attributed to increased usage of plastic money.

According to the International Organisation for Migration, the majority of Zimbabwean diasporans live in South Africa, the United Kingdom, Botswana, the United States and Canada.

Although no official figures have been released, it is estimated that there are about five million Zimbabweans living outside the country.