The Sunday Mail
THE African Development Bank (AfDB) estimates that more than 140 million Africans are domiciled outside the continent; while in 2013 the IMF forecast Sub-Saharan Africa’s Diaspora to the Organisation for Economic Co-operation and Development countries stood at seven million.
(The OECD is an intergovernmental economic organisation of 36 countries, founded in 1961.) The IMF, using the gravity model, estimates this number is likely to soar to 34 million by 2050, which is a whooping 385,7 percent increase. As such, the importance of Diaspora remittances cannot be overemphasised.
In 2015, overall Diaspora remittances to developing economies rose to US$450 billion, a figure which was more than double the foreign direct investment received in the respective economies in the same year.
However, of that amount, African Diaspora remittances stood at US$35,2 billion. This trend shows that the Diaspora is integral to the sustainable socio-economic development of their countries of origin.
That said, it is worrying to note that the exact number of Zimbabweans in the Diaspora is unknown. But the Zimbabwe National Statistics Agency (Zimstat) puts the figure at three million, which represents 23 percent of the country’s population, based on the 2012 national census.
However, Diaspora remittances to the country remain pitiably low. Remittances peaked to US$935 million in 2015, which was 6,7 percent of GDP .
This was relatively lower than total remittances for The Comoros and Lesotho — fellow Sub-Saharan countries — which amounted to 20 percent and 17,4 percent of GDP respectively.
This shows that as a country, we are not doing enough to harness remittances. As the country positions itself for re-industrialisation, the need to harness the Diaspora for both remittances and expertise becomes urgent.
There is need to begin implementing the Zimbabwe Diaspora Policy, which was launched in July 2016. Its major objectives are:
◆ Formal mainstreaming of Diaspora into the national development agenda by creating an enabling environment in which the Diaspora is effectively integrated; ◆ Establish necessary inclusive institutions for the co-ordination and proper administration of Diaspora issues;
◆ Tap into Diaspora resources and encourage the use of formal channels for remittances;
◆ Create formal, transparent and lucrative channels of investment and economic participation by the Zimbabwean Diaspora in order to harness and maximise the potential of the Diaspora in contributing to Zimbabwe’s development; and
◆ Develop mechanisms for dialogue and co-operation with the Diaspora through informing and expanding services offered by embassies to include processing of official documentation.
However, the Diaspora policy seems to lack effective drivers needed to achieve its specific objectives. While I was fortunate to be part of a twoday workshop on the development of a Zimbabwe Diaspora Policy Action Plan on July 5-6, 2017, it seems the recommended draft action plan is receiving little attention. In any case, it is doubtful if the Zimbabwe Diaspora Directorate, which was charged to oversee the implementation of the plan, is still up and running.
Worryingly, it is also not clear whether the Zimbabwe Diaspora Advisory Council and the Technical Committee on Diaspora matters — which used to be chaired by the permanent secretary in the now defunct Ministry of Macroeconomic Planning and Investment Promotion — are still functional.
Surely, Diaspora remittances are a key facet of the national economy. Currently, Zimbabwe’s exports — though growing — are still relatively low, nostro account balances remain depressed, while capacity utilisation stood at 45,1 percent in 2017.
Further, current lines of credit to the productive sectors of the economy are attracting usurious interest rates averaging 12 percent against regional averages of between five percent to seven percent.
This calls for the effective implementation of the Diaspora Policy. Government can consider either issuing Diaspora bonds (sovereign debt instruments sold by Government to the Diaspora) or other instruments that are designed to raise development finance. Already, the Diaspora has shown that it has the ability to support local economic growth.
The US$400 million National Railways of Zimbabwe deal with the Diaspora Infrastructure Development Group — which involves the refurbishment of 28 locomotives, delivery of 34 new locomotives, including the refurbishment of 768 wagons and procurement of 200 new wagons — is quite instructive.
It is clear from the foregoing that Diaspora contributions can be a vital source for financing critical national projects.
Not only will this help Zimbabwe achieve middle-income status by 2030, but it will help Sadc’s Industrialisation Strategy and Roadmap.
The Zimbabwe Diaspora Policy has to be implemented without delay.
◆ Takudzwa Chisango is an economic analyst and founding CEO of CT Capital. Feedback: chisangotakugmail.com