Zimbabwe received a total of 746.9 million U.S. dollars in diaspora remittances between January and June this year, up 159 percent from 288.7 million dollars received during the same period last year.
Presenting the 2021 mid-term budget speech to Parliament, Finance Minister Mthuli Ncube said total diaspora remittances for the year were projected at 1.3 billion dollars, helping to maintain a current account surplus.
Zimbabwe received 1 billion dollars in remittances last year. Diaspora remittances have overtaken foreign aid inflows into Zimbabwe, and have contributed to the country’s resilience to global trade shocks, according to the World Bank.
Ncube said development partners contributed 430 million dollars to Zimbabwe during the first half of 2021, of which 273 million dollars was from bilateral partners and 156.7 million dollars from multilateral partners.
Ncube remained optimistic about growth prospects, indicating that Zimbabwe’s economy is projected to grow by 7.8 percent this year after two years of recession.
“The strong rebound of the economy is anchored on better 2020-21 rainfall season, higher international mineral commodity prices, stable macroeconomic environment and COVID-19 pandemic response measures, including vaccination program,” Ncube said.
He said higher growth rates are projected in agriculture, electricity generation, accommodation and food services, as well as financial services.
On inflation, the minister said Treasury and the central bank will continue to pursue strong monetary and fiscal policies to sustain the current disinflationary path which has seen annual inflation for July falling to 56.37 percent from 106.6 percent the previous month.
The annual inflation rate of 35 percent is targeted by year-end, Ncube said.
The banking sector remained safe and sound and adequately capitalized, despite the disruptive impact of the COVID-19 pandemic, the finance minister said.
Exports were projected to increase by 4.2 percent from 4.9 billion dollars in 2020 to 5.1 billion dollars in 2021, with mineral exports expected to maintain strong growth on account of the continued strong performances in platinum group metals and recovery in chrome and high carbon ferrochrome exports, Ncube said.
He said the COVID-19 response measures, coupled with the vaccination exercise currently underway globally and domestically, continue to give hope to the sustained economic recovery in Zimbabwe.
“Therefore, let’s focus on building resilience and recovery of the economy in the middle of this COVID-19 storm,” Ncube said.