Money sent home by the more than three million Zimbabweans who are working outside the country is contributing more to foreign exchange earnings than the tobacco industry, according to the Reserve Bank of Zimbabwe (RBZ). It is estimated that Zimbabweans living abroad contribute at least US$1 billion a year to the country’s foreign exchange earnings. The amount is expected to be around 30% higher as the RBZ only measures funds sent in through formal banking channels, and not the piles of cash routinely taken across the border or the supplies sent by those living in neighbouring countries to their relatives in Zimbabwe. Only mineral exports earn more in foreign exchange, according to the RBZ. The central bank is encouraging remittances by the diaspora and the repatriating of foreign earnings by companies. In October 2018 it put pressure on the commercial banks to implement a February 2018 policy which requires banks to ringfence foreign currency for foreign exchange earners that include international organisations, diaspora remittances, free funds, export retention proceeds and loan proceeds. The policy was introduced to encourage exports, diaspora remittances, and the deposit of foreign currency into Zimbabwean bank accounts, according to RBZ in its October 2018 policy statement. Despite these measures the well-publicised shortage of hard currency in Zimbabwe is continuing, with a direct impact on freight volumes. Imports of raw materials and components have been affected because the Zimbabwean manufacturers do not have access to the necessary foreign exchange to pay for them. As a result, production is down and exports have also been affected. It is estimated that around US$10 billion is trapped in the electronic accounts of local banks by the shortage of hard currency.
INSERT
