British, Swiss embassies in drive to cut costs of remittances

The embassies of the United Kingdom and Switzerland have called on remittance service providers to slash transfer costs as a means to keep remittances flowing into the country in light of Covid-19 induced economic challenges affecting the country’s major source markets.

The United Kingdom, South Africa and the United States are among the major remittance source markets who account for the largest chunk of close to US$1 billion the Zimbabwean Diaspora sends home.

Presenting the Mid-term Policy Review last week, Finance and Economic Development Minister Mthuli Ncube projected that remittances, which stood at US$921.7 million in 2019, could register a slight decline of 4.9 percent to US$877 million in 2020.

Zimbabwe’s projection is particularly encouraging considering the fact that the World Bank has forecast a 20 percent decline in remittances to low and middle income countries due to Covid-19 induced challenges.

Minister Ncube’s projection is further corroborated by the UK and Switzerland’s ambassadors to Zimbabwe who said the general sentiment from Zimbabwean expatriates in their countries is that they will continue supporting their families back home despite the Covid-19 challenges.

As part of measures to ease the sending of remittances, Zimbabwe recently signed up to the global call to action on remittances and this gives the country access to advice and support on remittances.

In an opinion paper jointly authored by UK ambassador to Zimbabwe, Melanie Robinson and her Switzerland counterpart Niculin Jäger, the two also called on policymakers to ease regulatory requirements for service provides,

“We’re asking regulators to ease regulatory and licensing requirements and to help banks continue providing remittance banking services during the crisis.

“And we’re calling on remittance service providers to look at ways of cutting transfer costs and making it more attractive for remitters to send money home,” counselled the diplomats.

“Switzerland is supporting the development of new technologies to transfer money abroad, for instance via mobile phone, as well as micro-insurance and savings schemes that allow migrant workers to send money home and invest their savings with a single click.

“As we marked the UN’s International Day of Family Remittances (June 16), we are delighted that Zimbabwe recently signed up to the global call to action on remittances.

“This will mean that Zimbabwe too has access to up-to-date advice and support to ensure this crucial lifeline can be kept open to the benefit of Zimbabweans in-country and their families and friends across the world.

“The Zimbabwean expats we hear from are unanimous in their determination to carry on supporting their families and communities back home,” reads the opinion piece.

Remittances are a critical foreign currency earner for Zimbabwe with their contributions almost equalling tobacco which is one of the country’s largest foreign currency earners.–

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