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Oliver Kazunga, Senior Business Reporter
ZIMBABWE received a record US$1 billion in diaspora remittances last year, surpassing US$635,7 million realised in 2019.

The Reserve Bank of Zimbabwe (RBZ) had projected that diaspora remittances would close the year at US$940 million.

In his 2021 Monetary Policy Statement issued Thursday RBZ Governor, Dr John Mangudya, attributed the improvement in Diaspora remittances to the liberalisation of the use of free funds in the country and improved channelling of remittances through formal channels.

“In the year 2020, diaspora remittances amounted to US$1,0 billion, a 58 percent increase from previous year of US$635,7 million,” he said.

“The increase in diaspora remittances is mainly due to liberalisation of the use of free funds in the country and improved channeling of remittances through formal channels.”

During the year under review, international remittances received through the normal banking system on behalf of non-governmental organisations (NGOs) amounted to US$647,8 million in year, a 26 percent increase from the previous year’s US$519,4 million.

Altogether, international remittances, which comprise transfers by NGOs and Zimbabweans in the diaspora as at December 31, 2020, totalled US$1,7 billion, an increase of 43 percent from US$1,2 billion during the same period in 2019.

Economic analysts have urged the Government to craft policies that attract Zimbabweans in the diaspora to channel their resources beyond domestic consumption as they have a key role to play in transforming the economy.

Zimbabweans in the diaspora stand a chance to participate in various sectors of the economy as well as investing in capital markets, venture capital funds and pension funds and various bonds by the Government or the private players.

The country has a strong skilled and non-skilled diaspora population mainly in South Africa, the United Kingdom, Canada, Australia and the United States.

An estimated three million Zimbabweans are believed to be in the diaspora and they regularly send money back home to sustain their families.

Countries such as China and India, for instance, offer different business-oriented incentive models that enlist diaspora contributions to development.

These countries have succeeded in becoming among the leading global economies without reliance on foreign direct investment only.

On performance of external loans, Dr Mangudya said last year loan facilities with a value of US$1,3 billion were approved by the Exchange Control while in 2019 the offshore loans approved stood at US$1 billion, representing a 32 percent increase in terms of loan approvals.

The loans were skewed towards the agriculture sector, which accounted for more than 50 percent in 2020 and the previous year, mainly on account of offshore tobacco financing facilities.

During the period under review, between January and December 31, local financial institutions processed foreign payments amounting to US$4,5 billion representing a three percent increase from US$4,4 billion recorded for the same period in 2019. — @okazunga