There are reportedly as many as 7 million Zimbabweans in the diaspora. It is widely accepted that the actual number could be between 3 and 5 million. Regardless of what the actual number is, it is apparent that there are millions of Zimbabweans in the diaspora. In South Africa alone, over 2 million Zimbabweans are living there. Chances are high that you directly or indirectly have a loved one in the diaspora. Zimbabweans in the diaspora are pivotal to the lives of many back here in Zimbabwe. In this article, I want to highlight the importance of diaspora remittances to Zimbabwe. This refers to individuals, families, and the economy as a whole.
What Are Diaspora Remittances?
Remittance refers to the act of transmitting money, bills (and so on), to a distant place, in return or payment for goods purchased. Diaspora simply means any dispersion of an originally homogenous entity. This diaspora, in the context of this article, refers to Zimbabweans living outside Zimbabwe, dispersed all over the world. Diaspora remittances then mean these are money and goods Zimbabweans living outside Zimbabwe send back home.
The Importance Of Using Official Channels
Last year, saw a sonic boom in diaspora remittances – exceeding US$1 billion. In 2019, diaspora remittances did not even reach US$700 million. It was roughly US$636 million in 2019. So what explains the sharp rise in 2020? It was the coming in lockdowns that culminated in limited movement. This meant that people could no longer use informal means they used before.
A perfect example is South Africa; people used to have money and goods sent here through buses, trucks and the like. The closing of the border due to lockdowns significantly shut that down. This forced many to resort to official channels to receive money and goods from the diaspora. Projections for 2021 seem certain to exceed last in terms of diaspora remittances.
What Role Can You Play In Contributing To Diaspora Remittances In Zimbabwe?
Using Formal Channels
There is a crucial role you can play in boosting diaspora remittances. If you are reading this and you are Zimbabwean in the diaspora, you are important. You probably have loved ones back here in Zimbabwe. I would encourage you to use official channels when sending goods or money back here. There are now many registered money transfer services to choose from. Several business service providers can now receive payment from you and send goods (e.g. groceries) to your loved ones here.
Startups And Businesses Must Tap Into The Diaspora Market
Startups and businesses have an even bigger role in contributing to all this. They should make sure their businesses accommodate and cater for Zimbabweans in the diaspora. Every startup or business in Zimbabwe must tap into the diaspora market. I often tell entrepreneurs and business people that the diaspora is a huge market they must tap into. Suppose you run a fuel service, a supermarket, a restaurant, and so on – incorporate the diaspora market.
Make it possible for Zimbabweans in the diaspora to pay for goods and services for their loved ones back here. The beauty of this is that you will streamline the process of diasporans fending for their loved ones back here. Beneficial to your business or startup, you will get to have access to the much-needed foreign currency. Most diasporans living abroad can easily make Visa cards or MasterCard payments in US dollars. That will be a good thing for your cash flows.
Formal Channels Ought To Make Their Service Cheaper
Another important thing to add is that businesses and startups should figure out how to make the service cheaper. Earlier I highlighted some comparative diaspora stats between 2019 and 2020. However, it is abundantly possible that it could be the tip of the iceberg. It is virtually impossible to measure how much in terms of diaspora remittances is raked in informally.
Bear in mind that receiving money and goods from the diaspora informally is laden with risks. Many people have been duped, been victims of theft and so on. Yet many have continued to still prefer the informal route, why? There are several possible reasons but one of them is the cost factor. It is relatively cheaper to receive money or goods from the diaspora using informal means. This calls upon businesses and startups to make their services cheaper to lure diasporans.
Diaspora remittances are central to boosting the country’s GDP. Given how the local economy is mercurial and income levels are high and unstable, diaspora remittances help address that. Diaspora remittances can even extend to promoting FDI into Zimbabwe. They can also bolster strategic business partnerships across nations. For example, right now there are startups linking diasporans and Zimbabwean businesses. That is why you can now find eCommerce platforms that allow diasporans to buy goods for their loved ones from business providers here in Zimbabwe. Zimbabweans in the diaspora are a colossal asset and it is high time we engage them in our business and startup pursuits.