Diaspora remittances hit US$746,9m

Diaspora remittances have risen significantly to U$746,9 million in the first six months of the year, up from US$288,7 million over the prior comparable period, latest Treasury numbers show.

According to figures presented by Finance and Economic Development Minister Mthuli Ncube, the country could end the year with Diaspora remittances at record levels.

“Between January and June 2021, the country received US$746,9 million in diaspora remittances compared to US$288,7 million received during the same period last year,” said Minister Ncube.

“Remittances are projected to continue to drive the current account surplus in 2021, with end of year projection of US$1,3 billion.”

The US$1,3 million estimate would be an improvement from remittances last year, which amounted to circa US$1 billion.

Last year, the country’s Diaspora remittances jumped 58 percent, a development that helped the country cover gaps left by trade disruptions caused by the Covid-19 pandemic. To the extent of the improved remittances inflows, Zimbabwe managed to record a current account surplus.

The current account records the value of exports and imports of both goods and services and international transfers of capital.

“The country has managed to attain current account surpluses since 2019, with preliminary projections for 2021 at US$609,6 million (2,4 percent of GDP).

“The surpluses have been spurred by secondary income flows which have remained resilient during the Covid-19 era, although weighed down by increasing imports,” noted the Treasury boss in the 2022 Budget Strategy Paper.

“In 2022, the current account is projected to remain in surplus, partly due to remittances from Zimbabweans in the diaspora, which are expected to remain resilient, due to recovery in key source markets.”

The World Bank, in its latest Zimbabwe Economic Update, said remittances contributed to the country’s resilience to the regional and global trade shocks.

“Despite trade disruptions and the sharp decline in global economic activity caused by the pandemic, Zimbabwe’s current account remained in surplus at 5,3 percent in 2020.

“A key driver of the surplus was remittances in 2020, which saw a growth of 58 percent. The increase in formal remittances may reflect the shift to greater use of official channels for remittance delivery due to the pandemic,” said the World Bank.