Diaspora remittances to Zimbabwe have overtaken foreign direct investments due to the country’s controversial economic policies that continue to push foreign investors away, latest data from treasury shows.
Figures released by the finance ministry this week revealed that diaspora remittances in the 11 months to November this year increased by 97% to $966 million from $540 million recorded for the same period last year.
On the other hand, foreign direct investments in Zimbabwe in the 11 months stood at a paltry $566 million, compared to regional neighbors such as South Africa and Mozambique which received $10.8 billion and $4.9 billion.
This comes as findings of a report conducted by Centri, FinMark and United Nations Development Fund revealed that of the seven million adult Zimbabweans in the country, close to 61% were surviving on money sent home by the 3.3 million adult Zimbabweans living outside the country.
However, foreign direct investment inflows into the country have remained subdued, despite the fact that the country boasts of vast mineral resources such as gold, platinum, diamonds, tin and tungsten among others.
Government, however, believes the diasporans have the potential to become an important class of investors and a vital economic component not only in resuscitating the ailing economy but in national development.
In his 2016 National Budget, Finance Minister Patrick Chinamasa said the cabinet was working on adopting the country’s National Diaspora Policy which is set to encourage their diaspora to invest back home.
It is also the policy’s thrust to ensure Zimbabweans outside the country make use of the expertise they would have gained over the years in other countries for economic development.
The policy will ensure effective participation of Zimbabweans outside the country in national development.
Unveiled in September, the policy will ensure that Zimbabweans receive remittances from the diaspora to support the country’s productive sector.
The majority of Zimbabweans left the country over a decade or so ago to escape a biting economic crisis characterized by world record inflation and high unemployment.
Given that some funds come into the country through informal channels, especially from Zimbabweans resident in neighboring countries such as South Africa, Botswana, Mozambique, Zambia and Namibia, the contribution of the diaspora to circulating cash may be much higher.
Several countries like Ethiopia, Mexico, China, India and the Philippines have benefited from their diasporans for their economic development.
Ethiopia established formal mechanisms to encourage and facilitate diaspora engagement and setting up specific departments which deal with diasporans.
