Zimbabweans receiving money from outside the country are already enjoying bonus payments ranging from 3 to 10 percent of the value of the money they would have received under the Reserve Bank of Zimbabwe’s Diaspora Remittances Incentive Scheme (DRIS), The Sunday Mail has established. The DRIS is an extension of the bond notes export incentive initiative that is anchored by a $200 million facility from the Africa Export-Import Bank. This scheme came into effect on October 1, 2016 after the central bank’s governor Dr John Mangudya announced its establishment in his Mid-Term Monetary Policy. Speaking to The Sunday Mail on the uptake of the bonus scheme being implemented through money transfer agents, Dr Mangudya said there was a lot of excitement on the market.
“People are excited because of the bonus payments. We are working with money transfer agencies such as Money gram and Easilink. We award 5 percent which is split between the money transfer agency (2 percent) and the receiving individual (3 percent),” he said. “These are ways of improving liquidity in the country and we are seeing a positive development in that regard,” added Dr Mangudya.
The money transfer institutions, working with local banks, are moving with speed to complement the central bank’s efforts of promoting usage of official transacting channels, ahead of the introduction of bond notes that are expected later this month.
Use of formal channels to receive money from outside the country will also offset gaps in foreign direct investments whose flows tumbled from US$545 million in 2014 to US$421 million last year, a 23% slump.
The RBZ is currently seized with exploring ways of promoting exports and bringing in foreign currency to arrest the prevailing cash shortages that have seen long queues winding at banks since April this year with daily cash withdrawals limited to as little as $50 at some institutions.
FBC Bank spokesperson Ms Priscilla Sadoma confirmed that they were paying out bonuses to recipients of money that came in through MoneyGram, saying that the scheme was proving to be popular.
Last week, Telecel Zimbabwe announced that it will pay a 10 percent bonus to all recipients of inward remittances received via world remittance agents Hello Paisa, Mukuru and Mama Money.
This applies to those registered to the telecommunications company’s mobile money platform — TeleCash. Recipients who are not registered with the company’s mobile money platform receive the 3 percent incentive under offer from the RBZ.
Telecel’s mobile financial services head, Ms Violet Masunda, said in a statement last week: “Telecash has decided to offer a 10 percent incentive to all registered users who receive international remittances from the diaspora community to encourage the use of formal channels as well as to grow the base of registered Telecash customers.”
With the country’s liquidity crisis biting hard, remittances have been key in easing the situation and the bonus incentives are expected to further spur the flow of hard currency into the country.
Diaspora remittances are the second largest source of liquidity in the country after exports, reaching US$830 million in the first half of 2016. Given their significance in the economy, Government is now working hand in glove with the private sector to ensure that the money comes in through proper channels to avoid any leakages.
An estimated five million Zimbabwean citizens are resident outside the country. Last year, diaspora remittances amounted to $2 billion and the RBZ estimates that half of that came into the country through informal channels, hence the need to plug the holes. The central bank recently embarked on a countrywide aggressive awareness campaign ahead of the introduction of the bond notes that are expected to get into circulation before the end of this month.
Under the bond notes export incentive scheme, exporters will get up to 5 percent of the value of their exports which will be paid into existing US dollar accounts. The bond notes will be at par with the US dollars. Meanwhile, Dr Mangudya has also advised the banking public to use proper channels in seeking cash.
“There are unscrupulous elements who approach people seeking to convince them to make purchases on their behalf using bank cards in exchange of cash. Be advised that this is not permissible in the Banking Act and therefore people should not be duped into that,” he said.
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