The Impact of diaspora remittances on economic growth in Zimbabwe

Author

Kahari, Pardon

Title

The Impact of diaspora remittances on economic growth in Zimbabwe

Abstract

The study primarily examines how the diaspora remittances could affect economic growth in Zimbabwe between 1990 and 2023. With migration patterns highly intensifying, remittance inflows have been rising. It is of interest to both policy makers and researchers to understand the transfer's effect on macroeconomic indicators. The study analyses the GDP and remittances relationship, exploration of Monetary Agency Transfers (MATs), and whether formal remittance channels aid economic development.
A quantitative research design was adopted using time-series data coupled with a primary set garnered through structured questionnaires targeting remittance-receiving households in five urban locations within Harare High-Density Suburbs. Simple linear regressions were run, supported by normality tests, to establish the direction of causality between diaspora remittances and economic growth. The data was statistically analysed using SPSS.
The findings reveal a moderate yet significant positive link between diaspora remittances and economic growth, with remittances explaining 24.4% of the changes in GDP. Interestingly, the growth of Monetary Agency Transfers had an even stronger positive effect, accounting for 44.1% of economic growth. Moreover, using formal channels for remittances showed an impressive positive impact, explaining 78.8% of the variations in GDP. These results highlight the essential role that formal financial systems and remittance tracking play in turning diaspora inflows into tangible economic benefits.
The study concludes by highlighting that diaspora remittances play a crucial role as a source of foreign capital, greatly influencing Zimbabwe’s economic performance, especially when funnelled through formal and efficient systems. It suggests that the government should enhance financial infrastructure, lower transaction costs, and encourage the formalization of remittance flows. These measures are vital for maximizing the positive impact of remittances on development and promoting sustainable economic growth.

Date

October 2025

Publisher

BUSE

Keywords

Diaspora remittances

Economy

Zimbabwe

Supervisor

Nil