27 August 2014

Zimbabwe: Diasporans Remit U.S. $412 Million in H1

Zimbabweans living abroad remitted a staggering $412 million back home over the six months period to June this year, multiple times the $67 million received in foreign investment.

In the interim period, FDI was down 59 percent from $165 million same period last year on the back of the perceived country risk. Zimbabwe's FDI is the lowest in the region.

In his maiden monetary policy statement, Reserve Bank Governor Dr John Mangudya's noted the contribution of locals living in foreign countries to economic development in Zimbabwe.

"It is against this background that Homelink shall be revamping its operations to provide tailor made products and services that meet the needs of the Diasporans," Dr Mangudya said.

More than 3,5 million Zimbabweans are believed to be living and working in foreign countries, presenting the country with an opportunity to tap into this key source of liquidity.

The southern Africa country has, since, adopting a basket of currencies in February 2009 been gripped in the throes of choking liquidity crisis due to low industrial and export performance, low foreign investment and limited access to lines of credit.

This has affected the flow of liquidity into productive sectors of the economy, stifling Government's efforts to turnaround the economy after a decade of decline, which ended in 2009 after the switching to a multi-currency regime.

Yet this comes against the backdrop that Government's new economic blueprint, dubbed Zimbabwe Agenda for Sustainable Socio-economic Transformation 2014/18, requires funding to the tune of $27 billion to implement its projects.

In recognition of the role Diasporans play in developing their economies, Dr Mangudya said exchange control for their participation on the stock market had been raised from 70 to 100 percent.

"All non-resident Zimbabweans shall be permitted to invest in any listed counter on the Zimbabwe Stock Exchange without any limit; that is up to 100 percent," Dr Mangudya said.

The Reserve Bank also said it will re-orient Homelink (Pvt) Ltd to provide a facilitative platform through which Zimbabweans in the Diaspora can be assisted to invest back home.

Homelink will collaborate effectively with the Zimbabwe Stock Exchange, the Zimbabwe Investment Authority and other financial institutions to develop various investment instruments for non-resident locals, such as high yielding Diaspora Bonds.

Further, the central banks said it will also put in place appropriate risk management measures to assure Zimbabweans in the Diaspora safety on the value of their investments.


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