Diaspora lifeline sends home US$1bn
Harare – Outside a small office in Harare’s central business district, Ms Prisca Chikwaka waits patiently for her turn to collect her money at a Mukuru booth.
Mukuru is one of the more popular money transfer services amongst Zimbabweans, who count an estimated three millions diasporans in their ranks.
This week, the 38-year-old Ms Chikwaka made the 340km trip from Makande Village northwest of Harare to collect funds sent from neighbouring South African by her brother.
“We are benefiting from the exportation of skills as a family. The country also benefits because when we receive our money, we no longer need so much government support in the rural areas where we live. We encourage our government to promote the exportation of skills in areas where jobs are not enough. But this must take into consideration the skills requirements that we have here,” she told The Southern Times Business.
Many Zimbabweans depend on diaspora remittances, and last week the central bank said the inflows increased by 58 percent to reach US$1 billion in 2020 from US$635 million in 2019.
“As at 31 December 2020, total international remittances amounted to US$1,7 billion, an increase of 43 percent from US$1,2 billion recorded during the same period in 2019,” said Mr John Mangudya, the Reserve Bank of Zimbabwe governor.
“In the year 2020, diaspora remittances amounted to US$1 billion, a 58 percent increase from previous year of US$635,7 million. The increase in diaspora remittances is mainly due to liberalisation of the use of free funds in the country and improved channelling of remittances through formal channels. International remittances received through the normal banking system on behalf of international organisations amounted to US$647,8 million in year 2020, a 26 percent increase from previous year of US$519,4 million.”
In total, Zimbabwe received US$6,3 billion last year in foreign currency receipts, including from exports, compared to US$5,5 billion in 2019.
This growth in remittances in a year when COVID-19 tore across the globe, upsetting industries and tippling companies in advances economies where the African diaspora work was surprising.
Many experts had projected doom for families that depend on diaspora remittances.
But it appears the African diaspora were prepared for this, and resorted to savings to continuing supporting their families.
According to the World Bank, remittances to Sub-Saharan Africa grew almost 10 percent to US$46 billion in 2018, supported by strong economic conditions in high-income economies.