As we all know, Zimbabwe has never been more reliant on its children living outside the country. From January to October 2023, Zimbabwe received $1.47bn in remittances, an 8% increase over 2022.
These remittances are now one of the biggest sources of foreign currency in the country. In 2022, they represented 14% of total forex inflows and that has only increased.
That’s all impressive but there is a lot of money coming in through unofficial channels that is not captured in the impressive figures we talked about. That’s especially true when it comes to remittances from South Africa, from which 40% of total remittances come from.
Why do people still trust bus drivers, runners and malaichas to carry envelopes full of cash across the border when there are multiple organisations offering hassle-free electronic options? The cost – that’s the reason.
The International Organization for Migration reports that the average cost of sending remittances is 9.2 percent. Econet says it can get as high as 15% for the sender and an additional 3% for the recipient to cash out. That’s bonkers.
So, with that picture painted, I think we can all appreciate Econet’s move to offer free transfers to the country. Econet says individuals and companies in the United Kingdom and South Africa can send money into Zimbabwe free of charge and the recipients also cash out for free.
No more giving up 10-20% of your money in transfer fees. This easily becomes the cheapest way to send money back home, why trust the truck driver at this point. I imagine Econet will have to charge again at some point in the future and so we need to take advantage of this while stocks last.
Zimbabwe declared a national disaster over the drought the country is facing and Econet says this move is meant to help Zimbabweans weather the acute challenges caused by the drought.
I imagine InnBucks’ Send Money Home Free promotion which offers free transfers too might have influenced this generous gesture as well. But who cares why we are getting this sweet deal?
Econet opens first free remittance corridors to Zimbabwe
Zimbabwe’s largest telecommunications and technology company, 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 has partnered with its sister company, Sasai Money Transfer, to enable individuals and companies in the United Kingdom and South Africa to send money into Zimbabwe free of charge, starting today (May 2, 2024). The receiver also cashes out of their EcoCash wallet for free.
International remittances attract a charge of up to 15% for the sender, while the receiver is charged 3% when cashing-out.
Econet Wireless Zimbabwe CEO Dr Douglas Mboweni explained that the latest decision is aimed at helping Zimbabweans to weather the acute challenges caused by the drought.
The country recently declared a national disaster over a drought caused by the climate event known as El Niño, which has left more than 2.7 million people in need of food aid.
“We hope Zimbabweans in the Diaspora will use the savings to send more money home to their families,” Dr Mboweni said.
“The majority of remittances to Zimbabwe are conducted through these two main corridors (the UK and South Africa). 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,” he said.
The Econet CEO said he hopes the move by Econet will encourage other companies facilitating remittances into Zimbabwe to reduce their fees, noting that it was time that remittances into Africa in general were brought down “to assist with the continent’s economic development agenda”.
Dr Mboweni added that the initiative was in support of government efforts to increase diaspora remittances coming into the country through formal channels.
Econet’s extensive EcoCash agent network ensures that even people in remote rural areas have access to low-cost financial services, reducing the need for recipients to travel long distances to collect cash.
Econet said Remittance transfers will be facilitated through the EcoCash US dollar wallet, which is accessible by dialling *153# on an EcoCash registered Econet line.
Senders in the UK and South Africa can access Sasai Money Transfer by downloading the Sasai Money Transfer App on the Google Play Store and on the App Store.
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