RBZ moves on diaspora remittances

Tinashe Makichi Business Reporter
The Reserve Bank of Zimbabwe has engaged a central bank from the region to help it set up a diaspora remittance system aimed at promoting sustainability of the sector, RBZ exchange control director Morris Mpofu has said.

“Diaspora remittances remain a critical source of liquidity in the market and the RBZ will continue to place effective systems to encourage use of formal channels by citizens living outside Zimbabwe.

“Therefore we are currently working on setting up a diaspora remittances system and we are in the process of engaging reputable institutions on the SADC region in undertaking this project,” said Mr Mpofu but declined to mention the identity of the central bank.

It is estimated that about three million Zimbabweans are residing in the Diaspora and there has been growing recognition that migration if managed properly can positively contribute towards national development.

The RBZ, however, has come up with several policy interventions aimed at enticing the diaspora to use formal channels in remitting funds back home.

He said remittances are a stable and significant source of external financing for developing countries, overshadowing official development assistance, private debt and portfolio equity.

India, Israel and Ethiopia have taken advantage of large inflows of remittance to issue diaspora bonds to raise project finance for public sector investment programmes. Israel raised about $25 billion within a 30 year period.

Given the importance of remittances to the country, Mr Mpofu said the RBZ in close collaboration with other Government departments will continuously review policies that govern remittances industry with a view of promoting sustainability of the remittances sector.

“Regrettably, it has not always been easy for Zimbabweans outside the country to send money home. Many have been forced to send via cross border buses and other risky and unreliable methods which resulted in many customers losing the money.

“Sometime this year a team of officials went to India with the aim of understanding how the Indian system on diaspora remittances works. The visit does not necessarily mean that we will end up with a system exactly the same as that of India. Yes there are some good things that we might end up incorporating but the trip to India was just to understand how their systems operate,” said Mr Mpofu.

He added that the RBZ’s new Diaspora Remittances Incentives Scheme is set to reduce the cost of diaspora remittances into the country.

The DRIS, an extension of the central bank’s 5 percent export incentives scheme that was announced earlier this year will come into effect on October 01, 2016.

Mr Mpofu said the 5 percent incentive will benefit both the money transfer agent and the receiver of the funds on the basis of a 2 percent/3 percent split.

“DRIS is in line with the Reserve Bank’s efforts to incentivise all earners of foreign currency in the country, it doesn’t matter whether it’s an exporter of goods, exporter of services, remittances or any free flow of money into the country.

“The five percent DRIS is going to be shared between the company (Authorised dealer with Limited Authority) and the recipient. Three percent is going to go to the recipient and 2 percent to the Authorised Dealer with Limited Authority (ADLA). This is to assist in reducing the cost of receiving and sending remittances.

“The mode of payment is such that the ADLA is expected to prefund the payout. That is why we are giving them the 2 percent, because we know it will be on a reimbursement basis. The Reserve Bank pays the incentive on the basis of money received,” said Mr Mpofu.

He said the five percent DRIS will be implemented on a reimbursement basis which the RBZ will do “within 48 hours of the money having been sent.”

DRIS was announced by RBZ governor Dr John Mangudya earlier this month in the Mid-term Monetary Policy. It is aimed to boost diaspora remittances into the country, which have dipped of late.

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  • Thomas Chibvere

    You want our money but not our vote? No thanks to your bond notes, I shall not feed the system that chased me away from my home.

    • bajay

      true mate.they should allow us to vote then money later

    • Moe_Syzlack

      Not to mention a certain clueless 92yr old geriatric calling diasporans bum cleaners. Let them crash and burn

    • Kwangwari Gwayendepi

      Your refusal to support measures that are being put in place to help resuscitate our ailing economy,does not affect members of the regime. These guys are doing just fine,they’re building mansions,that even those in the diaspora can only dream of. These guys are buying the latest models of luxury cars. So you’re simply hurting the ordinary citizens. These guys will still get theirs with or without your support. I’m sure you still have members of your extended family in the country who can use the bonds you’re turning down.

      • Cde Zvinoshupa

        my friend, we are not hurting anyone by keeping our resources where they are best looked after. they are the ones killing and hurting the citizen with their corrupt, ruinous and out of date policies. We are not running the country, they are!

        • Freedom not just Independence

          Sando dzako. The govt runs the country, not the diaspora.

      • MkanyaGP

        Ordinary citizens will be hurt? Really? Then they will learn to vote wisely next time. Meanwhile, I will send money home to my extended family, using any other means other than this DRIS!

      • Masocha

        So kabahlukane lama diaspora if they are doing just fine, doh!

      • Jairosi

        The Chefs are not doing fine my friend, that is why these measures are being rushed through. They were doing fine as long as they could get $US for their overseas shopping trips but the cash has run out. Have you analysed the implications of the 97% of revenue going to salaries scenario announced by Chinamasa? It means the govt is bankrupt and they have to find other sources of cash fast, either print or extort from diaspora.

      • Zootopia Kakara Kununa

        The fact that they want it it means they desperately want to use it saka tati haiuye

    • yowe

      Excellent post

  • Kusvikazvanaka

    At 92 someone is still 100% pushed to behave like an active role model. It’s ridiculous. You can blame sanctions and the tajamukas and all but the long and short of it is the policies are too bad also most ministers too corrupt for the small economy. Hopefully corrupt officials will be made to be accountable one day

  • Ndini ndadaro

    When you want money “diasporans” become Zimbabweans. When its election time they are denied their right to vote. Zanu yapererwa, manje hamulume

  • Zvambu

    Zimbabweans are cleaners , laborers, waiters etc , Israelite’s owns businesses , Never compare a horse and a donkey . Zvakatonaka zvakadai siyai vatumire mari dzavo kuno kumusha sezvavari kuita.

    • diasporan

      Maybe that’s what you wish to hear. Some call it sour grapes.

      With that said, I have high respects for the cleaners, laborrer, waiters etc. They are essential and play their role in society regardless of how you look down on them. My own mother was a maid for a white family.

      Guess where I am now….?

      I am an engineering consultant. I co-founded a company that employs 23 permanent employees 5 of them with highly competitive postgraduate engineering certifications. We have 8 contract-based engineers. Each with at least 5years experience and doing well where they are posted.

      We partner with big engineering firms and are not out of work.

      We broke even a year ago and have posted very good profits. So much that we now have investors knocking at our door.

      Just stating facts.

      You know what also? I know Zimbabweans that are doing even much better than we are!

      Maybe you should work on your bitterness. Spite and mockery doesnt improve your or their situation.

      If anything, it degrades you and reflects how very shallow you are.

      • Freedom not just Independence

        Zvambu is correct though. Whilst you may be doing well, the majority of Zimbos outside of the country are struggling. And things are getting tighter across our borders, hence the dwindling diaspora remittances. Truth is truth, we have to look at the general point of view. Zimbos are not anyway near to what the Jewish diaspora is like. The government must just fix the ecoonomy, too many Zimbos suffering out there.
        I myself, I am also doing well. I send average USD15k home every year but I know that I am only part of the few fortunate ones. In Jorburg, street lights, traffic circles, labor pick-up points are everyday littered with hungry Zimbos. Its a fact

      • Masocha

        Murivangani,…….. the majority are what Zvambu said they are. S/he did not belittle anyone, but just stated a fact that one needs to bear in mind when comparing the Israeli and Zim situation. I think you did not understand the point he was making, but hey Eng. well done mate!

  • Cde Bvanyangu

    When its election time the diaspora cant vote. When the regime is broke it looks to the diaspora… Vanhu havana kupusa.

  • Wilson Magaya

    A great product only question is does it answer any specific need from the market. Have you asked your customers if this is what they are looking for. One thing for sure is that the costs of sending money through eco-cash are extremely high because for the same transaction to China or Holland from USA sending $1000 to Zimbabwe costs almost 10 times more. I look forward to some creativity and institution of a system that does not take advantage of the users. I think we have to appreciate that diaspora is not an entity but rather people, Zimbabwen People. “Nyika Vanhu”, Stat where the diaspora is and what their needs are, “Musha Matare” Talk to the diaspora. Action creates miracles….

    • Dr Sithole

      @Wilson Magaya. I agree with you. Whilst this sounds like a noble initiative, there are some missing fundamentals. There is no clearly laid out strategy, purpose or goal for which the funds will be invested. For example, if I were to advise the RBZ, like I do for other African countries on infrastructure financing and transaction advisory, I would suggest a tangible investment in roads, water or ICT infrastructure where a minimum contribution from the Diasporans will be $100. Then appoint an independent finance management firm or create a multi-purpose/donor (donor as in diasporans) trust fund housed by a reputable institution such as AFDB or DBSA. Much as we respect and cherish our sovereignty, very few of our people trust the RBZ and the current government with their money. In summary, in the absence of such clear strategy, goals and purpose for the fund…there is a real high risk that whatever funds generated will be used for consumptive purposes (no need to mention Ministers and MPs geeting new expensive vehicles on the back of such effort rather than investing it for the greater good).

  • diasporan

    Well… I’ll just continue sending the money the same reliable way I’ve been sending.

    I think those who use formal channels will still use those same channels, if they were confident in them.

    The problem would be if:

    a) You force people to bank that money
    b) You decide to tax that money

    You will have done the proverbial shooting oneself in the foot OR killing the goose that lays the golden eggs.

    Good luck!

    • Venda

      hear hear

  • Zakaman

    Retaining deadwood such as Morris Mpofu and retrenching all young technocrats from the RBZ just proves costly. There are better ways to transfer money across borders. Wht worked 10 years ago will never work now stupid Mpofu. The RBZ should prune off deadwood of which it has too many.

  • Mister Arcadia PhD.

    We will never trust anything this thieving government does,so forget it! What happened with the Homelink bull dust ??? You think takanganwa? Mxmmmmm

  • ADF

    Diaspora remittances are part of the sustainable development objectives for any nation and Zimbabwe should adopt this approach and be very honest about it. It is also linked to technology acquisition. A lot of those in the diaspora are working in industry sectors in which Zimbabwe is still struggling to master or develop, in addition to cash remittances Zimbabweans can be encouraged to remit know-how which can help us meet the 2030 development goals. A few years ago I tried to encourage an old engineer friend of mine who was working on the electric train project in South Africa.The idea was that with his experience and my experince we look at how to resuscitate the electric train system in Zimbabwe, his main concern was the government attitude to such an initiative. I totally agreed with him and the whole discussion was shelved. Remittances at national level is all about ideology, shared vision and trust

    • Chasura

      Nhasi wataurawo zvine musoro. Wakadyei over the weekend? Wapotsa pakusataura kuti the majority of the diaspora are very young, well informed and risk conscious, they will never take a risk with their billions with a 92 year old sekuru at the helm and let alone waffling garbage at every opportunity. Myself i have a lot of experience in Technology but the moment i wanted to establish a cheaper and alternative way of communication in Zimbabwe, i was told its a national security threat because it could afford everyone an opportunity to own a tablet and next to free wifi data packages. Food for thought.

  • Hlahla Hamburamatope

    Desperate times calls for desperate measures, Diasporans literally dollarised the economy and are consistently a significant component in the Zim GDP. But this latest attempt at trying to tax our remittances are a futile measures as the broke Government is now washing dirt ports pachitubu, chinopwa. We are not an easy target.

    The Government can engage us, we a 5 million wealth zim export, but you treat us nekuseri kweruoko. I have three of the many proposals that can turn a broke Government’s fortunes. Government avail land to us at ten years to pay basis but no private players as these real estates have inflated land value and stolen from us as they double sell same stands.

    But the most important is getting your house in order

    .

  • aussiemigrant

    Israel cared about its people and its people cared about Israel, that has never happened here, just get told to voetsek, whitey, get out mdc……ask the peeps in the diaspora…more are caring less the longer Bob is in.

    • sky

      Jews transformed the desert into the only developed country in the middle east because they love their country.

  • Tatendamhofu

    Interesting. Let’s start with the Beit Bridge Border post. The uncaring attitude of Zimra officials who will handle Xmas traffic. Coming back home to spend money. Isn’t this the remittance money you are looking for. People spend 6 hours facing a stinking toilet! One officer serving 2000 people!

  • Investor

    3 million Zimbabweans outside of the country for a country with not above 15 million people leaves a lot to be desired. The ruling elite have stolen the future of many generations. One desiring to fight their background barriers have to also deal with also the political and economic side. Dreams have been shuttered. Consult the people and stop being chefs instead of servants.

  • Loveness Manyati

    The national purse is dry, now the regime seeks other avenues of looting, manje hamuwane kana cent gore rino…kikiki

  • Venda

    What on earth are these chaps talking about? I have been receiving money from SA with no problems at all. Just some times that instead of getting US$ they offer me rands. Saka nyaya ndeyei apa? Government irikudei apa? Mukuru and the more established platforms are fine pasina Mugabe neZANU (PF), tiudzei kuti hurumende irkuda kunyatsopinda papi??
    Tapota explain, mari dzedu dziri mumabank emuno muZimbabwe dzirikunyura dzichiitwa bond takatarisa-

  • Gamatox Mutasa

    Kikikikikiki this is laughable really.Your President said “vanhu vari kuita mabasa etsvina,vachikwenya tuchembere misana” but now his gvt wants the money yevanhu vanoita mabasa etsvina? I would rather send my money nemacross border and risk losing it than feed this parasitic gvt that has been sucking our blood.The President and his cronies have more flying hours than a pilot and they want us to continue funding their luxurious tastes? Never.Until you start respecting human rights and affording all citizens equal opportunities then you can forget about people sending money thru your stupid system.We cant fund a Gvt that has no love for its citizens whom they brutalise daily for daring to ask for accountability and good governance.All the money generated in the country is going towards satisfying the luxurious tastes of Ministers and their cronies and we can never do that.Hatipengeba.Makatichenjedza nezvamakaita mazuva aGono kutora mari yedu yamusina kushandira

    • Chihuta vs Bond

      Well said Mutasa

    • Mister Arcadia PhD.

      Well said Mutasa.

  • thetruthshallcome

    The countries where the diasporans live have sound economic policies which foster transparency and not dictatorship. If you see people running away from their own country and seeking economic refugee in foreign lands, the leaders must ask themselves, “what is happening? Where have we gone wrong for this to happen?” However, this does not happen in Zim but to despise the Diasporans and not afford them the citizens rights. But on the other hand, the govt tries to lure them to remit more cash to prop up a dictatorship. I have never heard where people get arrested for telling the leadership that they have failed. People in the diaspora have seen transparency and good governance and they are well ahead in terms of economic development (that if they are engaged “properly” they will develop this country in no time). Afford them the right to vote, afford them transparency to challenge govt policies, afford them the conducive environment to invest, give them the land and see what happens etc the list is endless.

  • Chasura

    Not mine. Handiti you have all the natural resources to pluck into and turn them into manna. Nhasi moda yevanobata tsvina dzechembere dzevarungu? Torai from natural resources, minda yakati bayai vanhu and also from those endless and countless roadblocks that victimise us everytime we come driving mota dzetsvina. Isnt it your dear leader and his all weather friends have signed mega deals and not to mention ZimAsset? The list countless and so are the billions. Musatisembura. Not mine!!!!!!

  • Comrade Chipikiri

    why not mobilize money from the December 12 brothers?

    • Chasura

      Ooooh yeah that would end their financial crisis. Get on it Mangudya, why dont you round up all those drug addicted hobos from Brooklyn and empty their pockets to sustain your government? Isnt it they fought to the bitter end in your corner in the just ended imperialist infested UN club meeting. Wow that would be great Mr Learned Governor.

  • Blake Carrington

    Ever heard of goodwill.

  • Cde Zvinoshupa

    besides all, nothing is ever properly and objectively managed in Zimbabwe especially when the government is involved. Just some phat sharks looking for another source of funds to abuse! By the way, when are we going to be allowed to cast our votes from wherever we are?

  • MkanyaGP

    I will remit money back home to my extended family, using any other means, other than this DRIS!

  • Mafirakureva

    I will never deposit my hardly earned cash into a Zanu PF dark cave, not in a thousand years.

  • Gary WekuZviyambe

    Vana vangu vakanditumira mari neDRIS tinoburana!

  • Freedom not just Independence

    Yangu, inouya naMunenzva kunyange zviite sei…Tinotowana zvekubhita system chete. Since SI64, tiri kungopinza stuff nevakomana. I would rather pay a corrupt ZIMRA official, or a corrupt police officer, kuti anofidha mhuri yake, pane kupa suku-kuviri inoti kana yaguta inokuruma. Ngazvife, zvinotsvira mumoto pane kuti nyawudza.

  • Widzo

    lol do you really trust them to invest with them

    • munhu mutapa

      Just as long I have proof that invested with them its okay.I can sue them for any breach of contract.The Reserve Bank won’t go anywhere or close down no matter which government comes .

  • Ndere

    Madhiri ekuda kurora mari dzevaanhu . Tiri kukuonai hedu

  • Zootopia Kakara Kununa

    But they must not vote .not at all they are sellouts and terrible people …Regime changers they must all not be allowed back home .. But their money must come home to rebuild this country called Zimbabwe

  • Gamatox Mutasa

    Vakashaya mari vachatanga kuita raid maAccounts evanhu like they did nembavha inonzi Gideon and they will say “its for national security reasons’ MaZimba ngatingwarei-vanogona open accounts in SA chero paMusina where at least your money will be safe.Take out all your money than benefit these pests

  • Wilson Magaya

    I agree.I am not sure we are going to as a nation be able to harness much until we deal with the trust issues. We have lost trust among our own citizens let alone foreigners. As you say I think diaspora remittance must be attached to something of value and people realize that value and in so doing we may start to rebuild the trust we so much need to make Zimbabwean institutions function properly again. I think you agree kuti “Nyika Vanhu, Musha Matare”…..

  • hunzi007

    I like it when the same said political guys buy luxury cars to drive on pothole infested roads. Im not sure if they still enjoy the luxury offered by these cars. It is a shame that even the Norton road that the president is chauffered on at least twice a week reminds me of the old tarred strips of roads that serviced the yesteryear white farms. Having a luxurious life in Zimbabwe is not so fascinating when surrounded by hundreds of hungry and pale suffering Zimbabweans.

  • http://zanuyakaora.com Cde Jonas Magaga

    Wow, you want our money but you won’t even allow us to vote in elections!