MUTARE– A top economist has urged Zimbabwe to grant political rights and create incentives for its diaspora community in order to leverage on remittances as financers of broad based economic development.
Dr Prosper Chitambara of the Labour and Economic Development Research Institute of Zimbabwe (LEDRIZ) said given the significant remittances over the years, the diaspora is already contributing and incentives will nudge them to do more.
He said besides giving them political rights to vote, government can also offer incentives like diaspora infrastructure bonds to finance investment in capital projects.
Zimbabwe is facing severe foreign currency shortages that have curtailed imports of essential commodities like fuel and electricity, contributing to an economic decline which can be arrested with participation of the diaspora states Dr Chitambara.
He said there are African countries that are already recording dividends from mobilizing funds from the diaspora, giving the example of Ethiopia which financing development from diaspora remittances.
“We can finance development by mobilizing the diaspora, but to mobilize the diaspora we need to give them certain political rights and create incentives for them to want to invest.
“Diaspora is a critical avenue of financing development because we have more than 3 million Zimbabweans and government can issue like other countries, diaspora infrastructure bonds targeting their citizens living abroad to finance development.
“A lot of countries now in Africa they are mobilizing quite a significant resources from their diaspora. For example Ethiopia, every year it is receiving significant resources from its diaspora to finance development.
“We need to give them certain political rights, like the right to vote for example so that they feel that they are part and parcel of us,” said Dr Chitambara.
In 2019 alone, Zimbabwe received US$635 million dollars in diaspora remittances, up 2.6 percent from 619 million dollars in 2018, according to statists from the Reserve Bank of Zimbabwe.
The RBZ also shows that international remittances received through normal banking channels on behalf of international organizations amounted to US$521 million dollars in 2019, down 9 percent from the previous year’s US$570 million dollars.
According to a 2015 World Bank report the top 10 nations that get the most money from their diaspora, Nigeria ($25 billion), Ghana ($3.8 billion), Senegal ($2.7 billion), Kenya ($2.1 billion), Zimbabwe ($1.9 billion), Mali ($1 billion), South Africa ($900 million), Uganda ($800 million) and Ethiopia ($500 million).
The World Bank report Migration and Remittances, Recent Developments and Outlook, also showed that in 2015 diaspora remittances peaked at US$2 billion, while the country received US$1.85 billion from the diaspora between 2016 and 2018.
This recent significant decline is attributed to person not using the formal banking systems to send through money to their families in Zimbabwe, in reflection of the trust deficit in the local banking sector.