LABOUR MIGRATION: HARNESSING REMITTANCES FOR ECONOMIC GROWTH

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Zimbabwe since the colonial era has been both a sending and receiving country of labour migrants. The trends in labour migration have been accelerated with the onset of the economic recession by the turn of the century. The country has experienced an upsurge in the outward migration of both skilled and unskilled manpower in search of employment opportunities in the region and abroad.

In this section we focus on the outward migration of manpower and the benefits that may be derived as a result. Possible recommendations are also suggested in order to effectively harness diaspora remittance flows into Zimbabwe.
Statistics released by the Treasury indicated that diaspora remittances, which are the major source of liquidity in Zimbabwe after exports, declined by 15% over the first half of the year. During the first six months of, diaspora remittances amounted to US$387.9 million, compared to US$457.8 million received during the same period in 2015 (See Fig Below)

Diaspora Remittances to Zimbabwe

The decline was mainly due to the rapid currency depreciation against the US dollar. The situation was further exacerbated by the increase in the use of informal transfer channels.

Economic experts have for a long time bemoaned the lack of comprehensive policy and coherent legal, institutional and policy framework for implementing migration processes in an integrated manner. The Government through the establishment of Labour Migration Policy, Diaspora Policy and the Human Capital Export Policy among other initiatives, has taken steps to correct this unfavourable situation.

There is however need for a coordinated approach among Government Departments so as to avoid the duplication of efforts towards the same cause. One of the major policy shortcomings was that some of these initiatives were undertaken in an ad hoc manner, without the effective participation of all key stakeholders and without a policy instrument governing the management of labour migration.

Stakeholders are generally agreeable to the notion that well-managed labour migration programmes yield positive effects not only for the migrants and their families but for the entire country. However the supressed remittances inflows into Zimbabwe have not been able to offset the adverse effects brought about by brain drain.

Sectors such as health and education among others were hard hit by the massive outflow of skilled labour. Though some would argue that labour migration reduces unemployment, the benefits thereof have not been significant for Zimbabwe. 
1.1  Arrangements to be considered:

In order to effectively tap into diaspora remittances, there is need for effective measures to be put in place and these include:

a) Bilateral Agreements

Experiences from other regions show that in order for both sending and receiving countries to derive maximum benefits from labour migration, it is imperative to enter into formal arrangements that provide for the recruitment and employment of labour migrants.

In the case of Zimbabwe, the findings of the 2014 LFCLS show that the bulk of the emigration (97%) is into the neighbouring countries, mainly South Africa, Botswana and Mozambique.

Consequently it would be prudent for Zimbabwe to enter into formal arrangements for the export of labour in areas where the country has comparative advantage. This entails the establishment of Bilateral Labour Agreements with each of identified countries so as to derive optimum benefits from Zimbabwean nationals working in the region.  

b) Widening Remittances Channels

The widening of remittances channels such as the Western Union, Home Link and Mukuru Money Transfers vital. Government should encourage the establishment of financial infrastructure and institutions in all areas of the country.

This way, the channels of sending and receiving money will be decongested making it even more efficient and convenient for the locals. Recent developments involving establishment of mobile money transfers across boarders and penetration into the remote areas is commendable.

c) Enhancing information dissemination to the diaspora

Efforts should be made to integrate the migrant workers into the home financial system. This requires an inclusive monetary policy and the dissemination of information on the domestic markets to the diaspora. Information on current economic trends both on the local and international scenes will help the migrant workers to make informed decisions on investment, thus, minimising risks associated with investment.
d) Promoting productive use of migrant remittances

Policy measures are needed to ensure that remittances from the diaspora shift from being used only for household expenditure to being a source of capital for projects such as investment in properties.
e)  Reduction of import duty on capital goods

The need to incentivise investors through the reduction of import duty on capital goods such machinery and equipment, trucks, cars and passenger vehicles cannot be overemphasised. Currently, the import duty on vehicles is very high this hinders importation.