Zimbabwe risks missing out on its diaspora remittances targets for 2017 as the country has only received $540 million for the 10 months period to October, official figures from theReserve Bank of Zimbabwe (RBZ) have revealed. The RBZ is projecting diaspora remittances for 2017, excluding money that comes in the country through unofficial channels, to reach $750 million.
The country’s main sources of individual diaspora remittance are South Africa, UK and USA.
Responding to local media in May this year, RBZ Governor John Mangudya, said the country “expects $750 million through the official channels.”
Last year, diaspora remittances were $776,2 million down from $939 million in 2015.
The Government through the RBZ has been working towards boosting remittances by introducing Diaspora Remittance Incentive Schemes envisaged to increase the remittances sent through formal channels.
In its mid-term Monetary Policy Statement presented in August, the RBZ increased incentives for Diaspora remittance from three percent to 10 percent effective August 1, 2017 to encourage channelling of remittances through formal channels.
The central bank introduced the Diaspora Remittances Incentive Scheme (DRIS) last year to benefit both the money transfer agents and the receiver of the funds on the basis of a two percent and three percent split to reduce the cost of receiving and sending remittances.
Dr Mangudya said incentives for money transfer agencies and remittances received as cash would remain at two percent and three percent respectively.
“DRIS has attracted international remittances to flow through formal channels, but informal remittances are still high,” he said.
“In order to enhance financial inclusion for remittances recipients, the bank shall increase the DRIS for remittances received through banking or wallet accounts from three percent to 10 percent, with effect from August 2017.”
Analysts, however, say with only two months left before the end of the year, the country might miss its targets given the level of remittances received so far.
“The first quarter, the country only received $180 million and 10 months down the line we are only at $540 million, using simple averages we will close the year below the target mark and also below last year, unless we get more during the festive season which should be a peak period under normal circumstances.”
The decline in remittances into the country can be attributed to the increasing preference of the diasporans to send remittances through informal channels given the challenges to withdraw cash through formal channels.
Recently there were complaints from recipients saying that they were failing to access cash sent from the Diaspora through mobile money transfer services provider WorldRemit.
Mobile money provider and Econet owned EcoCash is one of the channels affected by the challenges.
Econet has since responded saying it is the banks the company works with that are facing challenges in accessing cash.
Responding to a query by a listener on Capitalk FM, Econet’s communications officer Fungai Mandiveyi said: “We are aware that some of our customers have recently been experiencing difficulties accessing funds sent to them from abroad via international money remittance agencies.
“This is mainly due to challenges being experienced by the local banks we work with in accessing funds from nostro accounts sitting with their correspondent banks outside Zimbabwe.
“We regret the inconvenience caused to our customers and are continuing to work with all stakeholders involved to find a solution to the problem,” said Mandiveyi.
Analysts said such challenges will force diasporans and the recipients to use informal channels to send money.