I don’t think it’s debatable that it is not sanctions or climate change that have hit Zimbabwe the hardest in the past few decades. Rather, brain drain has been our biggest enemy and will continue to be so for the foreseeable future.
Yes, targeted sanctions, economic mismanagement, and climate change (droughts and cyclones) contributed to the brain drain.
Had it not been for Zimbabwe losing its brightest and most enterprising, we could have been better able to weather the storm. Recall that Rhodesia was under worse sanctions but it did better.
The only silver lining we have from losing millions of skilled labourers is that they continue to support the country. Zimbabwe would be in a much worse position if it weren’t for them.
In 2023, we earned US$7.2 billion from exports, which was a respectable 9.25% increase from 2022. The only fly in the ointment being that it was mostly minerals and commodities (80-90%).
Remittances
On the other hand, money sent by our children abroad reached US$1.8 billion. These remittances, as they are called, were equal to about 25% of our export earnings. That is a significant stat.
The Deputy Minister of Foreign Affairs and International Trade says we are on course to beat that 2023 figure. Q1 2024 remittances grew by 18%, from $420 million in Q1 2023 to $494 million.
With those kinds of funds flowing, it is no wonder we are spoilt for choice when it comes to remittance services. Right now, EcoCash is offering free transfers for the foreseeable future to entice users.
That could help divert some of the transfers that were entering the country in suitcases and under car seats to formal channels. Depending on whom you ask, remittances coming in via unofficial channels could be between 25% and 150% of official amounts.
One of the biggest reasons for the popularity of these unofficial channels is the cheaper transfer costs. If competition among remittance service providers leads to lower charges, we could see a corresponding increase in the use of formal channels.
Productive use of remittances
Zimbabwe is a small economy, and if the $1.8 billion were used to boost economic productivity, we would be golden. So, we find both the private sector and the government trying to help the diaspora make that transition.
We first talked about Jamboo around this time last year, saying,
The Jamboo guys believe remittances from Europe to Africa for bread and butter issues are spoken for. As is the flow of funds to fund Diasporans’ own projects and charitable donations.
Jamboo sees a gap when it comes to remittances for institutional investment. They will be looking to fill that gap. Allowing diasporans to invest in other organisations in Africa.
Jamboo will be involved to some degree in structuring the investment opportunities that will be presented on their platform.
The government has established a Working Party of Senior Officials on Diaspora Engagement to handle diaspora inquiries and issues. They aim to coordinate and advance the interests of the diaspora in the country’s socio-economic development.
The government is also encouraging the formation and registration of diaspora associations through Zimbabwean Embassies. These associations are meant to facilitate better information flow and collective efforts.
The government is also profiling the diaspora. They say profiling is crucial for effectively integrating them into national development programs. This initiative helps the government understand the demographics, locations, and concerns of Zimbabweans abroad.
The International Organization for Migration (IOM) has helped in that effort.
Good idea but …
No one could argue that putting remittances to productive use is a good idea. The biggest challenge is that the foreign countries our relatives live in are struggling too. While not to Zimbabwe’s extent, diasporans aren’t exactly swimming in moolah.
Combine that with the struggling relatives they are sending money to who need help with daily meals, and you can see how much of the remittances are used for basic necessities.
The IOM says that 72% of the diaspora community in South Africa is supporting three or more family members in Zimbabwe. Indeed, remittances are mostly used for household consumption.
For most diasporans and their families back home, there just isn’t any surplus to channel towards ‘productive use.’
There are a few with those surpluses, though, and so the effort is worthwhile.
Voting rights
The government will never go for this, but considering that diasporans are playing such a huge role in our economy, should they not get a chance to vote for the country’s leaders?
I know it won’t happen, but I’m just throwing it out there. Maybe if the diasporans had a say in the dealings of the country, they would have a better incentive to invest in it. Food for thought, I guess.
The Deputy Minister says,
It would be remiss of me if I fail to acknowledge the ever-growing contribution of our diaspora to the country’s socio-economic development through social and financial remittances.
Well, it would be remiss of you not to reward said Diasporans with a say in the country’s future.
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13 comments
The gvt likes the diaspora remittances but they dont like to give the people the diaspora vote
Put your mouth where the money is
Zanu pf knows the risk of allowing diaporians to vote, and as such they will never allow it to happen under their watch.
is it true that zanu pf’s brains are drained becoz of sunkshuns ?
Indeed remittances have saved millions from desperation and destitution. Regrettably the US$ dollar 💵 is greatly undervalued and abused in Zimbabwe 🇿🇼. If this was not the case, the billions sent home every year would be more than enough to sustain households, as well as enable constructive investment. Zimbabwe 🇿🇼 would be miles ahead.
What I observed over the past few decades is that those earning outside Zim but with financial obligations in Zim are the most economically disadvantaged people on earth while those who make money in Zim but spend it outside have it going really really easy.
I’m sorry to say this but most of this money is just laundered money…gold mafia sell their gold and diamonds outside and send their money back easily
Only a fool would believe that ordinary citizens sent $1.8 billion to Zimbabwe…in other words they illegally sold minerals worth billions overseas and brought back at least $1.8 billion 😁
interesting read, can someone do me a favor and the list of the zero rated sites in Zimbabwe, I only know of techzim chete that works.
Pindula
Download the Pindula app on Google play store
Here we go again with the sanctions, I see you have adjusted your stance slightly by including and emphasizing “targeted”. Oh , please give us a break. Tell me how do you reconcile the fact that our economy is doing relatively well despite targeted sanctions. Why is it that the same people who were in power 10-20 years ago, could not do what they are doing now? Was it sanctions? Really. We have lost some 30 odd years of development all because of self inflicted economic sabotage. But then again, if you repeat something over and over, you end up forgetting that it is a LIE. Shameless. NXA!!!
100% ✅
These people should avoid making the same mistake ignorant family members make, and that is assuming there is lots more cash to squeeze out of all the diasporans.
A lot of them are sacrificing long-term goals and wellbeing for the sake of supporting those at home. I’d bet the increase in remittances is more a function of increasing people in the diaspora over them actually having greater income to send home.
Look at the top destination economies and you realise things aren’t getting any easier out there for Zimbabweans. It’s cute of government and startups to eye that mostly fantasy money for ‘useful’ things, but maybe first try for real to make Zimbabwe a place that can support the talents and aspirations of all her citizens and not just the chosen few.