Zimbabwe Remittance Corridor
Zimbabwe Remittance Corridor4 December, 2010 •
This study, undertaken by Saul Kerzner, was commissioned by Cenfri, on behalf of the FinMark Trust, to sketch a picture of the remittances landscape in the Johannesburg-Zimbabwe corridor. The aim was to build an understanding of the dynamics of remittances sent to Zimbabwe and the drivers of change and to gauge the scope for and barriers to the formal intermediation of remittances.
Zimbabwe is heavily reliant on remittance flows from South Africa and particularly Johannesburg. As many Zimbabweans are undocumented, they cannot access formal channels for money transfers. Until recently, much of the value transferred back to Zimbabwe has taken the form of basic groceries, cleaning and medical supplies, clothing and other household items, due to the limited availability of these items in Zimbabwe. It is anticipated that with the necessary political and economic reforms under the new unity government in Zimbabwe, remittances will continue to evolve back to monetary transfers and play a significant role in the recovery of the country.
The aim of this study is to build an understanding of the dynamics of remittances sent to Zimbabwe and the drivers of change, and to gauge the scope for and barriers to the formal intermediation of remittances. To address the objectives of the study, investigations were conducted in three phases between March and May 2009:
- Desk research to establish an understanding of the remittance market,
- interviews with Johannesburg based stakeholders in the remittance economy and
- a five-day overland trip on public transportation from Johannesburg to urban and rural areas of Zimbabwe to experience the remittance process first hand, to speak with remittance recipients and to gain an understanding of the Zimbabwe grocery retail environment.
Historical attempts to estimate the number of Zimbabweans in South Africa have been hindered by poor record keeping and the reluctance of undocumented Zimbabwean migrants to disclose their status. Two recent studies have provided more accurate estimates. In mid-2007, Professor Makina of UNISA estimated the Zimbabwean community in South Africa to be between 800,000 and 1,000,000 people, based on a study of Zimbabwean migrants living in inner-city Johannesburg. In late-2006, the Centre for Development and Enterprise conducted a household survey to estimate the number of foreigners in Johannesburg. It was estimated that 39% of foreigners (between 195,000 and 215,000) were Zimbabweans, but this is likely to be an underestimate due to the subsequent escalation of the economic crisis in Zimbabwe.