Zimbabweans living abroad almost doubled the amount of money they sent home this year

accreditation
0:00
play article
Subscribers can listen to this article
(iStock)
(iStock)

Zimbabweans living abroad almost doubled the amount of money they sent home this year, bolstering the economy, Central Bank Governor John Mangudya said.

Remittances jumped to $411.1 million in the first four months of the year, compared with $221.9 million a year earlier, Mangudya said by phone Wednesday from the capital, Harare. The inflows are Zimbabwe’s second-biggest source of foreign-exchange earnings, after revenue from platinum exports.

"The economy continues to rebound due to the stability of the currency and inflation on account of the good agricultural out-turn and the positive impact of the diaspora remittances," Mangudya said.

Economic reforms implemented by that country's Finance Minister Mthuli Ncube and the central bank over the past three years have helped rein in annual inflation to 162%, from a peak of 837.5% in July. The depreciation of Zimbabwe’s dollar has also slowed, with the currency weakening 3.9% against the US currency this year, compared with a 79% slump last year, according to data compiled by Bloomberg.

Central bank reforms, including the introduction of a currency auction, have increased the supply of foreign exchange in Zimbabwe, according to Coronation Fund Managers, one of the biggest asset managers in South Africa. That’s helped make it easier for foreign investors in companies like Delta, Zimbabwe’s biggest company by market value, and Econet Wireless Zimbabwe, its largest mobile operator, to repatriate funds from Zimbabwe, said Lloyd Mlotshwa, head of research at Harare-based brokerage IH Securities.

While the improving economic indicators have raised optimism about the outlook for the economy, the International Monetary Fund (IMF) cautioned last month that broader reforms are needed to sustain the gains the authorities have made. The IMF expects Zimbabwe’s economy to grow 3.1% this year — less than half the 7.4% the nation’s Treasury has projected.

Zimbabwe’s economy has stagnated for two decades because of political and economic turmoil, and a bout of hyperinflation in 2008 wiped out savings and saw investors exit the country.

Remittances last year totaled $1 billion, compared with $635.7 million in 2019. The inflows were second only to platinum exports, which generated $1.77 billion, according to central bank data.

--With assistance from Ray Ndlovu.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
14.35
-0.0%
Rand - Pound
19.81
-0.0%
Rand - Euro
17.08
-0.0%
Rand - Aus dollar
10.76
-0.0%
Rand - Yen
0.13
-0.0%
Gold
1,764.62
0.0%
Silver
25.81
0.0%
Palladium
2,467.49
0.0%
Platinum
1,038.50
0.0%
Brent Crude
73.51
+0.6%
Top 40
59,504
-1.5%
All Share
65,635
-1.4%
Resource 10
60,958
-1.7%
Industrial 25
87,956
-1.3%
Financial 15
12,995
-2.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
Should government have assigned a majority shareholding in SAA to the private sector?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, It's a good decision
62% - 123 votes
Not a good move
10% - 20 votes
Too early to tell
27% - 54 votes
Vote