Victoria Ruzvidzo In Focus
As the Government, private sector and other stakeholders put their heads together to quell the economic fires that threaten to consume the economy, it is critical that focus also be directed towards a critical constituency – the Diaspora.
Government is obviously aware of the potential contributions from the sector. The President has even said it is about time the country benefited from the brain drain of yesteryear that must now transform into a brain gain. Fair enough.
So much has been said and done by the central bank over the past decade or so that includes the Homelink strategy and the Diaspora bond issued a few years ago but there is now need to engage into higher gear in terms of harvesting all the economy can from its people scattered across the globe.
Global giants owe their status, in part, to Diaspora remittances and other gains for their non-resident nationals. Zimbabwe should follow suit.
Figures show that last year the economy realised about $1,4 billion in remittances. This is a significant portion of export receipts but it remains a fraction of what can come Zimbabwe’s way with a more concerted and rigorous campaign.
Zimbabweans hold significant positions in the banking sector, telecommunications, insurance, agriculture, health, media, and other sectors in economies worldwide. All these have capacity to send significant amounts back home while promoting skills and technology transfer to leverage production processes here.
Of the $1,4 billion in international remittances received last year, Diaspora funds accounted for about $700 million. This figure could turn out to be pittance once more effort is directed towards this luring this community.
A study commissioned by the United Nations Development Programme (UNDP) a few years ago discovered a sizeable number of Zimbabweans in almost every country across the globe although the most favoured destinations are South Africa, with an estimated 2,1 million Zimbabweans, United Kingdom with 400 000 and Botswana hosting 200 000.
Other African countries host a combined 200 000 while the United States of America and Canada have 50 000 Zimbabweans. Australia and New Zealand have 20 000 while the rest of the globe has a combined 50 000 at least.
It is believed that at least three million Zimbabweans live in the Diaspora.
If these were to send home $1 000 each per year, this country would receive $3 billion annually and you can imagine the impact this would have on the economy. Of course, we are not blind to the fact that some of these people are students who may actually expect support from home but the total figure in this study is quite conservative while $1 000 is also a small figure to send home in 12 months.
Many families receive monthly allocations from relatives while a sizeable number have invested back home and send significant amounts towards this.
Therefore, it is a fact that Zimbabwe’s economy could fare better with more aggressive engagements with the Diaspora community.
Presently Zimbabwe is in need of a huge injection of foreign currency to meet the cost of importing fuel, medical drugs, electricity and other needs. Companies urgently need foreign currency to import machinery and to purchase raw materials but the funds have been tight. Allocations from the central bank are inadequate to meet demand although the bank has gone out of its way to manage allocations and to secure funding from international financiers such as the African Development Bank (AfDB), African Export and Import Bank (Afreximbank) and other multilateral lenders.
While the economy waits with anticipation for a huge injection of funds, the Diaspora appears to be a low hanging fruit with the potential to bring solutions to the economic challenges in an amazing way.
Sentiment shows that many Zimbabweans are willing to help and are sold to the new dispensation and Government’s vision. What is required now is a solid and deliberate strategy to engage the Diaspora and map out inclusive solutions on how the economy can tap into this potentially lucrative segment of the country’s population.
The Ministry of Finance, the Reserve Bank of Zimbabwe and other players, in conjunction with such organisations as UNDP and the International Organisation for Migration (IOM) can work out strategies to harness the Diaspora constituency.
Zimbabwe needs its hands on every dollar it can get. The current economic state of affairs demands that every potential solution be pursued rigorously. We have investment houses and banks with the requisite skill to weave investment instruments and strategies to attract funds from the Diaspora.
Strategies can also be sought to promote the transfer of skills and technologies from those in the Diaspora exposed to new technologies and new ways of doing business.
Poor production systems have been Zimbabwe’s greatest undoing hence its failure to earn enough from exports. Therefore, if the Diaspora can help the country identify and import machinery that fosters efficient production systems this country would be home and dry.
Manufacturing, mining and other sectors of the economy have the potential to transform this economy but lack of resources has hampered efforts to raise production levels. These are the resources that are resident in the Diaspora community.
Elsewhere in the paper we carry an advert from the Government, the European Union and the International Organisation for Migration calling for research consultants on Promoting Migration Governance in Zimbabwe: Research and Policy Brief on Diaspora Bonds as a potential financial instrument for Zimbabwe.
“The project seeks to improve the migrant protection environment and enhance the participation of the Zimbabwean women and men in the Diaspora in national development,” reads the statement.
The research is expected to produce a policy brief on Diaspora bonds as potential instruments for Zimbabwe. This is exactly what the doctor ordered.
Zimbabwe needs to move with haste in this regard. The Diaspora community has raised concerns that need to be addressed. At least the major one on the Diaspora vote is settled come 2023.
Engaging the community should produce a win-win situation from which the economy can benefit immensely.
In God I trust!