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Noble Ncube and Dumisani Nsingo Business Reporters
THE country’s efforts to tap diaspora funds is facing a test as remittances from South Africa are likely to dwindle due to the continuous depreciation of the rand against major currencies culminating in a volatile and unfavourable exchange rate for both locals and the diaspora community from the neighbouring country. Zimbabwe has a diaspora community of approximately 2,2 million across the world with over one million of the populace residing in South Africa. Official diaspora remittances have been growing yearly, from $300 million in 2009 to more than $800 million last year, although the amount is certainly more as some of it gets into the country through unofficial channels. The diaspora remittances have reached close to 25 percent of the Gross Domestic Product.
In September, the Government unveiled the National Diaspora Policy which sought to provide a comprehensive framework for harnessing remittances from Zimbabwe’s diaspora as well as the protection of citizens outside the country. The objectives of the policy include developing mechanisms for dialogue and partnership with Zimbabweans abroad, establishing the necessary institutional mechanisms for co-ordination and administration of issues affecting diasporans.
The Office of the President and Cabinet will be responsible for providing oversight, monitoring and evaluation of the implementation of the policy. The Government is in the process of establishing a National Diaspora Unit in the Ministry of Macro-Economic Planning and Investment Promotion to develop diaspora-targeted packages to direct remittances towards productive ventures in the country.
Economist, Mr Prosper Chitambara said the weakening of the rand ahead of the festive season would impact negatively on remittances from South Africa.
“There is going to be a decline in foreign remittance from South Africa. The decline will be caused by the depreciation of the rand against other strengthening currencies . . .”Mr Chitambara said.
Confederation of Zimbabwe Industries president, Mr Busisa Moyo said the fall of the rand would result in increased numbers of people crossing to South Africa on shopping expeditions shunning local products, a situation which is retrogressive to the efforts being done by Government and various stakeholders in pursuing locals to buy locally produced goods under the Buy Zimbabwe Campaign.
“The fall of the rand will result in less people coming home from South Africa during the holidays as coming here will likely see them spending more than they will have anticipated. This will automatically see a decrease in foreign currency remittances from the neighbouring country. This will further create a bit of slow down as there will be less spending.
“Many people are travelling to buy from South Africa because they would have gained as the US dollar strengthens against the rand. The current festive mood is generally flat. There is no uptake of volumes of products. People are changing their monies to rand and travel to buy cheaper from South Africa,” said Mr Moyo.
However, Macro-Economic Planning and Investment Promotion Minister Dr Obert Mpofu said the fall of the rand against major currencies would have less impact on the country’s diaspora remittance expectations.
In his National Budget statement, Finance and Economic Development Minister Patrick Chinamasa said foreign remittances are expected to reach $960 million.
“Diaspora remittances are not all about the remittances that we get from South Africa but it’s actually looking at the remittances from our people throughout the world. What’s happening to the South African rand
Online Reporter