An increase in remittances from Zimbabweans living in distant locales and sending more money home helped improve the local economy, Central Bank Governor John Mangudya said, per a Wednesday (June 9) Bloomberg report.
Remittances from residents living abroad almost doubled, reaching $411.1 million January through April, compared with the same period in 2019, which saw $221.9 million, Mangudya told Bloomberg. The remittances mark Zimbabwe’s second-largest source of earnings from foreign exchanges.
“The economy continues to rebound due to the stability of the currency and inflation on account of the good agricultural out-turn and the positive impact of the diaspora remittances,” Mangudya told Bloomberg.
Total remittances in 2020 totaled $1 billion, compared with $635.7 million in 2019. Platinum exports generated $1.77 billion, according to central bank data, per the news outlet.
Finance Minister Mthuli Ncube and the central bank launched reforms over the pass three years and as a result, the region’s annual inflation dropped to 162 percent from a high of 837.5 percent in July. Concurrently, Zimbabwe’s dollar is depreciating at a slower rate, Bloomberg reported.
The COVID-19 pandemic did not totally curb global remittance flows, the World Bank said in a press release in May, PYMNTS reported. A total of $540 billion in remittances went to low- to middle-income nations in 2020, 1.6 percent lower than in 2019. Global expansion is forecasted to bounce back in 2021 and 2022, which could bring remittances higher.
Remittances — cross-border money transfers and peer-to-peer (P2P) payments — are a lifeline for people in developing economies. A report by Oxford Economics and commissioned by Western Union showed that remittances offered needed support for developing markets.
Raj Agrawal, executive vice president and chief financial officer of Western Union, told PYMNTS CEO Karen Webster in January that P2P international transfers provide the biggest infusion of money to developing countries.