The Sunday Mail
Editor’s Brief
Victoria Ruzvidzo
The US$1 billion remittances that a received last year from the Diaspora demands that more attention be accorded to that constituency as it becomes increasingly important in this country’s socio-economic dynamics.
That the Diaspora now ranks as one of the major contributors to Zimbabwe’s export earnings and the 58 percent jump in remittances from US$635 million, means it cannot be ignored. Statistics show that it comes after platinum as the second highest. The mineral registered US$1,7 billion in earnings in 2020.
The central bank last month attributed the rise to the liberalisation of the use of free funds and increased use of formal channels due to lockdowns.
The International Monetary Fund describes remittances as largely household incomes from nationals in foreign countries who would have moved temporarily or permanently.
Zimbabwe is estimated to have between three million and four million of its nationals living outside the country, particularly in South Africa, United Kingdom and Australia. These have had a huge bearing on the welfare of their families back home, particularly over the past two decades when the economy has experienced difficulties.
Research done early in the millennium showed that at least 50 percent of households in this country rely on remittances. This figure is expected to have risen significantly over the past decades. It is in this frame that authorities need to come up with strategies to harness the potential of the Diaspora factor in attaining an Upper Middle- Income Economy by 2030.
The United Kingdom Department of International Migration (2002) asserts that informal remittances represent two or three times the amount of formal transfer of funds. This means that effectively Zimbabwe earns more than the $1 billion captured in our books.
Of course as stated by the Reserve Bank of Zimbabwe, many were forced to opt for formal channels last year due to lockdowns, but it is generally believed that non-resident Zimbabweans send money back home via buses and trucks, particularly from South Africa, and friends and family in other cases.
While the remittances have helped keep families above the Poverty Datum Line, there is more that the Diaspora can do in contributing to national economic development. Indeed the use of formal ways of sending money ensures the funds are injected into the national economy.
The multiplier effects of inducing savings and investment, and increasing the demand for goods and services is quite beneficial to the economy.
The remittances have largely been for bridging the gap between incomes and consumption.
The figures for Zimbabwe have been growing steadily from about US$294 million in 2009 to a peak of US$935 million in 2015. Receipts then dropped to US$635 million last year before the phenomenal growth to the $1 billion mark, ahead of the US$994 million gold earnings. A number of countries in Africa and beyond rely on remittances to sustain livelihoods. In fact, Asian powerhouses such as South Korea, China and India experienced phenomenal economic transformations from Diaspora remittances.
Today these countries stand as giants, with China rising to become the second largest global economy. Last year the country received US$60 billion from the Diaspora. Developing countries such as Nigeria, Ghana, Thailand and Bangladesh also depend heavily on remittances from abroad.
In 2012, Zimbabwe’s Statistical Agency noted that some of the funds from the Diaspora were channelled towards social programmes usually neglected by aid or other forms of development finance.
Under Image Building, International Engagement and Re-engagement working group, the National Development Strategy 1 seeks to improve Diaspora participation in the economy through a review of the Diaspora Policy of 2016 and to enact enabling legislation.
It will promote “inside-out” or homeland driven Diaspora engagement while also establishing formal institutional and co-ordination structures.
The Government intends to establish trade and investment frameworks to promote public-private-partnerships involving Diaspora consortiums.
These strategies look set to increase the role of non-resident Zimbabweans in the economy. Many of them have lamented the absence of tailor-made investment options in which they can invest their funds.
But authorities need to move with haste to ensure greater participation by the Diasporans sooner rather than later. They can do more to ensure attainment of the 7,4 percent GDP growth and targets for succeeding years. Research has shown that Diasporans do not bring home just money, but ideas, mindsets, world views, values, attitudes and norms of behaviour whose sum-total is critical in fostering development.
Migration experts have said that to reap macro-economic benefits from increased Diaspora remittances, it is critical to build confidence in local financial systems and to draft policies that incentivise cluster investments by the nationals. These tend to be at a large-scale hence benefiting the economy in many ways.
Indeed the Government is in sync with this notion as indicated in the National Diaspora Policy of 2016 which identified eight key priority areas that relate to policies and legislation, the intra-governmental-diaspora relationship, institutional engagement, diaspora investment, remittances, national socio-economic development and knowing the diaspora and diaspora’s rights.
“The Government recognises that beyond the remittances from abroad, our diaspora presents social, economic, intellectual and political capital, a pool of knowledge and expertise which must be harnessed for the benefit of the country,” said the then Permanent Secretary in the Ministry of Macro-Economic Planning and Investment Promotion Ms Judith Kateera at a meeting held to discuss implementation of the policy, formulated with assistance from the United Nations Migration Agency and the European Union.
The Diasporans need to be made to feel important so they can fully participate in rebuilding the economy. Zimbabwe needs their money, skills, ideas and the impartation of the skills and technology acquired in their countries of residence.
As the world increasingly becomes a global village, the only way to compete effectively is to assess and adopt what other countries have developed, not that we cannot come up with our own inventions, but we may not need to reinvent the wheel is some instances.
Adopting and implementing the new ideas and technology in the form of farming methods, water harvesting, Information Technology, manufacturing, mining and other sectors of the economy can expedite the attainment of Vision 2030.
We hope a review of the policy as stated in the NDS1 blueprint will result in a more robust Diaspora engagement thrust.
However, while we acknowledge the increasing importance of remittances, we must not lose sight of the rich natural resource endowments in this country which we must exploit as we seek to grow the economy and improve our standard of living.
At some point Zimbabwe should grow its financial muscle to the extent that families should actually send funds to support their relatives and friends abroad. It is possible and it can be done. It just takes determination and total commitment to set goals.
In God I trust!
Twitter handle: @VictoriaRuzvid2; Email: [email protected]; [email protected]; WhatsApp number: 0772 129 992.
