Remittances are a key source of income for many Zimbabweans who rely on earnings from friends and families in the diaspora. The central bank of Zimbabwe has launched the ZiG short for Zimbabwean gold, a new “structured currency” backed by gold that will replace the Zimbabwean dollar. Photo: Jekesai Njikizana/AFP
Strive Masiyiwa’s Econet Wireless has opened free remittance channels from South Africa and the UK to Zimbabwe as the telecoms giant ups its play in the key industry.
Remittances are a key source of income for many Zimbabweans who rely on earnings from friends and families in the diaspora.
Over the past few months, the number of remittance channels has grown as more Zimbabweans leave the country in search of greener pastures, although charges have remained elevated.
International remittance charges are up to 15%, although new and digital platforms have knocked this fee structure slightly down.
This week, Econet said it was bringing back the EcoCash mobile money platform under its ambit after unbundling and separately listing it in 2018.
It said the platform would be a key remittance channel as it would also enable cash out of funds remitted from South Africa and the UK under Econet’s new zero-rated arrangement with Sasai Money Transfer, another company linked to Masiyiwa.
“Econet Wireless has achieved an Africa first by opening two free remittance corridors into the country, completely eliminating the cost to both sender and receiver,” Econet said.
The group, which has a presence in mobile and digital finance, added that it had partnered with Sasai Money Transfer to enable individuals and companies in the UK and South Africa “to send money into Zimbabwe free of charge”, starting yesterday.
Econet Wireless CEO Douglas Mboweni said recipients could “also cash out of their EcoCash wallet” for free.
“The majority of remittances to Zimbabwe are conducted through these two main corridors (the UK and South Africa),” Mboweni said.
“We don’t have to pay any third parties on those corridors, because we rely on a sister company in the group, which agreed to help out.”
Remittances have become all the more important for many Zimbabweans who have been afflicted by poor harvests because of the El Niño phenomenon that has induced a debilitating drought.
Zimbabwe recently declared a national disaster, with more than 2.7 million people in need of food aid.
An expert said the flow of remittances to Zimbabwe had been on the rise, with money remitted back home by Zimbabweans out of the country estimated at more than $1 billion (R18.7bn) a year, and constituting about 16% of the country’s total foreign exchange receipts.
“This comes from a large network in the diaspora, whether in the region (mostly South Africa) or further afield, including the UK.” he said.
“Remittances also flow internally within the country, from people working in town in government jobs or in businesses of different sorts.”
New channels, such as sending money through groceries for collection in Zimbabwe, have been gaining momentum on the South African corridor.
However, due to the high charges, remittances through informal channels remain prevalent such as remitting through transporters and through friends and relatives who will be travelling.
In 2023, Innbucks, another mobile wallet in Zimbabwe, partnered with a South African company to enable remittances.
Under the partnership with South African platform, Clicksendnow, recipients in Zimbabwe are able to receive funds through their Innbucks mobile wallets.
Clicksendnow is a South African platform run by Nedbank and Ukheshe that allows for remittances to the rest of Africa.
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