Dodoma — REMITTANCES from the Tanzanian diaspora surged to 2.116tri/- (approximately 810 million US dollars) between July and December 2024, signalling their escalating financial contribution to Tanzania's economy.
The Minister for Foreign Affairs and East Africa Cooperation Mahmoud Kombo said in the National Assembly on Wednesday that Bank of Tanzania (BoT) statistics reveal that the notable increase from the 2.045tri/- recorded for the entire 2023 period underscored the vital role Tanzanians living abroad play in national development.
He said the growing flow of remittances, which significantly enhance family livelihoods and contribute robustly to the nation's financial sector, is complemented by a substantial rise in diaspora investments in key domestic schemes.
In 2024, diaspora contributions to the UTT-AMIS Collective Investment Scheme climbed to 7.5bn/- (approximately 2.9 million US dollars), an increase from 6.4bn/- in 2023, the minister said.
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Simultaneously, their direct investments in real estate, through purchases of houses and plots via the National Housing Corporation and private developers, soared to 9.28bn/- (approximately 3.6 million US dollars) in 2024, up from 7.56bn/- the previous year.
Ambassador Kombo said the Ministry of Foreign Affairs and East African Cooperation has actively coordinated and encouraged the diaspora's participation in various economic, educational and social activities. A key method involves connecting diaspora members with diverse local institutions to provide services and products that facilitate their engagement in national development.
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The coordination has led to successful joint service clinics and meetings with the diaspora in strategic countries where Tanzania maintains a diplomatic presence.
He said for instance, in August 2024, the Ministry organised a Diaspora Clinic in the Comoros islands, bringing together over 300 diaspora members with eighteen service providers from both government and the private sector in Tanzania.
"This clinic facilitated discussions on bilateral opportunities and outlined pathways for mutual benefit," he said.
Furthermore, the Ministry participated in an International Migration, Diaspora Engagement and International Cooperation conference, organised by the International Organisation for Migration (IOM) in Sandton, South Africa.
This participation led to a collaborative "Tanzanian Diaspora Mapping" exercise with IOM. Once completed, this exercise will provide the government with crucial data on the diaspora's global distribution, enabling the development of more targeted and effective engagement strategies for national development.
To further streamline engagement and data collection, the Ministry reviewed its digital diaspora registration system (Diaspora Digital Hub) in July and December 2024.
The objective was to enhance user-friendliness and encourage greater registration, ensuring the government acquires accurate statistics vital for future development initiatives. The sustained growth in both remittances and direct investments underscores the increasing confidence and commitment of the Tanzanian diaspora towards their homeland's prosperity.
However, despite these positive trends, the scale of Tanzania's diaspora remittances drew criticism from Dr Charles Kimei, Member of Parliament for Vunjo.
Dr Kimei said Tanzania's personal remittances of US$758.8 million, representing approximately 0.9 per cent of its GDP, were "very small" compared to their true potential.
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He underscored this point by drawing comparisons with regional peers. He noted that Kenya's diaspora contributed 4.8 billion US dollars in 2023, equivalent to 4.1 per cent of its GDP. Rwanda received 537 million US dollars, accounting for 3.9 per cent of its GDP, while Burundi's 49 million US dollars represented 1.4 per cent of its GDP.
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World Bank statistics for 2023 further show Kenya leading the East African Community (EAC) with over 4.2 billion US dollars in remittances (3.9 per cent of GDP), followed by the Democratic Republic of Congo (DRC) with over 3.2 billion US dollars (2 per cent of GDP). Somalia, Uganda and South Sudan also received significantly higher remittances than Tanzania, placing Tanzania sixth among eight EAC member states in 2023.
