RBZ rapidly walks back diaspora remittances seizure talk after outrage

By Own Correspondent

The Reserve Bank of Zimbabwe (RBZ) has denied claims that it intends to force recipients of U.S. dollar-denominated remittances to convert their funds into local currency.

This comes after a viral video shared online in which RBZ deputy director, William Mamhimanzi, was quoted saying the apex bank was exploring measures to forcefully withhold the foreign currency sent back home by diasporans.

The remarks were met with widespread outrage and condemnation by diasporans and some economic analysts, prompting the central bank to issue a statement Friday night.

The bank said the market had misconstrued a video on social media in which a bank official discussed possible ways of boosting remittances.

“The Reserve Bank of Zimbabwe has noted the circulation of a video on social media whose discussion was focused on strategies for formalization of the informal sector and the resultant concerns from the market regarding misconstrued plans to review the current Diaspora Remittances Policy,” reads the statement.

“Accordingly, the Reserve Bank wishes to put it on record that there are no plans to introduce a New Diaspora Remittances Policy.

“In terms of our current Exchange Control regulations, Diaspora remittances are treated as free funds, which recipients can receive in foreign currency and change freely at their instance and preferred licensed agencies, as is the best practice globally.”

Millions of Zimbabweans moved into the diaspora over the past two decades, escaping hardship back home with most settling in neighbouring South Africa and Botswana as well as overseas in countries like Australia, Britain, Canada, as well as the United States.

Remittances from the Diaspora have proved critical for the economy after the country was shut out by international lenders with more than US$1.8 billion sent back to Zimbabwe in 2023.

“For the record, the diaspora remittances have continuously supported the economy, accounting for 17% of the total foreign currency receipts,” the RBZ said in its statement.

“Given the importance of remittances in the economy, the Reserve Bank will continue to explore incentives to boost remittance flows and not to hinder such as misconstrued.

“The Reserve Bank would like to assure the public and all stakeholders that recipients of diaspora remittances will NOT be FORCED to change their free funds at the point of collection and at any other time.”

Press Release: Diaspora Remittances Policy Clarification pic.twitter.com/DLfHmxfluL

— Reserve Bank of Zimbabwe (@ReserveBankZIM) August 16, 2024