LIVINGSTONE MARUFU
Diaspora remittances have hit a new four-year record, surging 48% to US$760.7m in the first 10 months of this year from US$513.5m recorded in prior comparative period as the Covid-19 induced disruptions forced people to send money through formal channels.
Over the years, Zimbabwe lost a great deal of forex as most people evaded formal channels to use alternative means.
Currently, diaspora remittances are the leading forex generator ahead of gold which stood at US$697m in the first 10 months of 2020.
The four-year high was disclosed by the Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, who spoke at a post-budget meeting, held in the capital this week.
He said diaspora remittances contribution to total exports proceeds improved by 3% during the first 10 months to 15% from 12% during the comparative period.
“It’s the first time in four years that we have reached US$760.7m during the first 10months of the year due to the fact that money was sent through formal channels. Despite not including November and December, the total remittances are satisfactory and are expected to be one of the best in years,” Mangudya said.
Economists projected the international remittances to exceed US$850m by year end as more people are confined in various countries and are likely not going to travel due to the spiking of the Covid-19 cases.
Remittances usually peak during the festive season and dwindle in January and February.
So far October has the highest amount recording over US$103m from US$59.8m during the same month last year, recording a 72% increase.
Mangudya said all the months this year were above US$60m except for April which recorded US$30.9m. Since June, the economy has recorded above US$85m going forward with September recording a 87% increase in remittance to reach US$98,3m from US$52,5m in September last year.
In recent years, the country had its highest individual remittances of US$939m in 2015 followed by US$838m in 2014.
The country’s diaspora remittances stood at US$776m in 2016, a figure which the country expects to obliterate this year given the current position that the remittances stand and the trend.
In 2017 the country recorded an 11% increase in remittances after it received US$699m fromUS$619 in 2018. Zimbabwe recorded US$636m in 2019 which was a 3% increase from 2018 diaspora remittances.
Economic analysts project that there will be a toss of the coin between gold and diaspora remittances as far as forex generation is concerned with tobacco expected to be in the third position.
With payment delays affecting gold production and the onset of the rain season, gold export receipts are likely going to fall this year, a situation that would leave Diaspora remittances at the pole position as far as forex generation is concerned.
