Remittances dropped by 15 percent in the first half of the year to $387,9 million due to rapid currency depreciation in source markets against the United States dollar. The Government has since moved to expedite the implementation of the National Diaspora Policy to promote the flow of funds through the formal financial system.
Diaspora remittances are a major source of liquidity in the country after exports. Chinamasa said the use of informal transfers also contributed to the decline. “During the first six months of 2016, Diaspora remittances amounted to $387,9 million, compared to $457,8 million received during the corresponding period in 2015.
“However, part of the decline might also be reflective of increased use of informal transfer channels,” he said. As part of measures to harness Diaspora remittances, by December 2015, the Government had licensed 34 money transfer agencies.
The minister said the anticipated decline in Diaspora remittances beyond 2016 would exert pressure on the country’s balance of payments.
“It’s therefore, vital that we expedite the implementation of the National Diaspora Policy to provide an enabling framework that promotes the flow of the funds through the formal financial system,” he said.