EDITORIAL COMMENT: Diaspora remittances vital for economy

dollarsGovernment’s efforts to harness Diaspora remittances has a lot to commend it. This is an area that has remained largely untapped so far. In 2014, we accounted for only about $1,8 billion from the Diaspora. This is far too low when compared to what other countries get from their nationals living abroad.

A closer look at remittances in other countries shows that with proper policy and strategy, Zimbabwe can reap more from the Diaspora. The International Monetary Fund estimates that international migrant remittances to developing countries reached $404 billion in 2013.

It expects that growth to accelerate to an annual average of 8,4 percent a year in 2014-2016, raising remittances to developing countries to $516 billion in 2016.

India received about $70 billion in remittances in 2013 while China got $60 billion. In 2013, remittances to Nigeria, for instance, amounted to about 22 percent of receipts from petroleum exports while inflows to India equalled 15 percent of exports and covered 12 percent of imports.

The World Bank and IMF researches show that remittances remain a major source of foreign resource flows for developing countries. In some cases they exceed official development assistance. This shows that remittances from people in the Diaspora can play a pivotal role in supporting the balance of payments positions for developing countries.

This is why we support Government’s initiative to launch a National Diaspora Policy.

The National Diaspora Policy unveiled last week seeks to provide a comprehensive framework for harnessing remittances from Zimbabwe’s diaspora as well as the protection of citizens outside the country. The objectives of the policy include developing mechanisms for dialogue and partnership with Zimbabweans abroad, establishing the necessary institutional mechanisms for coordination and administration of issues affecting Diasporans.

The Office of the President and Cabinet will be responsible for providing oversight, monitoring and evaluation of the implementation of the policy. Government will establish a national diaspora unit in the Ministry of Macro-Economic Planning and Investment Promotion to develop Diaspora-targeted packages to direct remittances towards productive ventures in the country.

It is therefore important to highlight the need for proper structures and mechanisms to receive and account for the inflows. By and large, diaspora remittances can significantly contribute to economic development.

We need to leverage on the huge number of Zimbabweans living abroad. They can contribute positively to the development of the country. It is estimated that between 500 000 and three million Zimbabweans live outside the country.

There is growing recognition that migration, if managed properly, can positively contribute towards national development. We must organise our Diasporans, provide support mechanisms and a safety net while they are in their host countries. We can benefit from them, not only from financial remittances, but also from investment, establishment of enterprises and technology transfer.

Zimbabwe has so far received remittances towards housing investments under Homelink. Now that Homelink has been rebranded, let us focus on setting up structures for receiving the inflows. If organised, we can account for diaspora remittances in a way that significantly enhances the country’s revenues.

We need to consider reserving some investment sectors for Diasporans. Diasporans want to see investment more than just consumption. If we encourage them to go into Export Processing Zones, we are likely to receive more.

Again, if we appreciate their contribution, we should be able to entice more to sign up.

They can also be encouraged to invest in infrastructure development. Government is planning diaspora engagement consultative processes in South Africa, Botswana and the United Kingdom.

We are indebted to the International Organisation for Migration for pledging $300 000 towards this process.

But when the consultative processes begin, there is need to have detailed plans, rather just the policy. How do we intend to structure the investment deals? What incentives are we going to offer them? These are some of the questions we need to consider for us to maximise benefits from the National Diaspora Policy.