Zimbabwe’s central bank woes diaspora remittances

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The Zimbabwe government has embarked on an offensive to drum up faltering remittances from the diaspora, a central bank official said on Wednesday.

In the six months to June this year, diaspora remittances amounted to $397 million, 13 percent lower than in the same period last year and the government wants the estimated five million Zimbabwean citizens resident outside the country to contribute more, to offset gaps in Foreign Direct Investment (FDI).

FDI, which dropped 23 percent to $421 million in 2015, is seen further declining this year, according to the central bank.

Morris Mpofu, the director of exchange control at the central bank said, the bank hopes the initiative will double the $1 billion that was remitted into Zimbabwe last year through official channels.

But the central bank estimates that a further $1 billion was also sent into the country through informal channels.

The central bank has extended the export incentive scheme for importers to diaspora remittances at between 2.5-5 percent of the amount sent to Zimbabwe through normal banking channels with effect from October 1 this year.

Mpofu said he was part of a team that returned from London on Tuesday, after meeting some Zimbabweans at the University of East London to impress upon them the need to send money back home through official systems.

Another team is expected to spend the next week in Canada, one of the countries playing host to a significant number of Zimbabweans, and is expected to round up the tour in South Africa, where an estimated two million Zimbabweans are resident.

“We met many Zimbabweans who showed keen interest in bringing money through official systems,” Mpofu told delegates at the launch of a partnership between Ecocash, the mobile payment platform owned by mobile operator Econet Wireless, and Mukuru, an online settlement platform domiciled in South Africa.

The majority of the people living in the diaspora left the country during a decade long political and economic crisis that ended with the formation of a unity government in 2009.

“There is need for us to move into this direction (encouraging people to remit funds through money transfer agencies). India receives $70 billion per year,” Mpofu told the delegates.

The partnership launched between Mukuru and Ecocash will enable Zimbabweans in South Africa to send money into the country via Mukuru.

The funds would then be instantly transferred into the recipient’s Ecocash wallet in Zimbabwe.

Source: The Southern Times