ZIMBABWE: Remittances slow the slide into ruin

Photo: IRIN

Cash from abroad helps families cope with cost of living

JOHANNESBURG, 4 July 2006 (IRIN) - As the cost of living in Zimbabwe continues its gravity-defying climb, a new report has underlined the importance to struggling households of the money and goods sent home by relatives working abroad. According to 'Remittances, Poverty Reduction and the Informalisation of Household Well-being In Zimbabwe', 50 percent of the households sampled across all income groups in the main cities of Harare and Bulawayo were regular recipients of goods and money from relatives living outside the country. "The most common types of remitted goods are also the most basic: food, clothes and footwear," said the report by the Global Poverty Research Group. It noted that parents tended to be supported by their children, with money often sent via informal networks to take advantage of the parallel market, where the US$1 is worth Zim$500,000 compared to the official rate of Zim$100,000. Engineering student Gabriel Ndlovu manages to stay enrolled in his polytechnic in Bulawayo, thanks to relatives in South Africa. "Since January, many of our classmates have dropped out of courses due to financial problems but we are still continuing. I do not even think we would be accessing the food we eat if it was not for the groceries they send." Last week the monthly cost of a basic food basket for a family of six rose from Zim$49 million (US$490) per month to Zim$60 million (US$600), but an average salary is just Zim$20 million (US$200). Harare-based economist James Johwa told IRIN that remittances played a key role in stabilising household food security and access to essential services like hospital care and education. "I would be condemning my dependants to starvation if I fail to send both money and groceries. They depend entirely on me," Adelaide Ndlovu, a Zimbabwean working in Swaziland, told IRIN. Thembelani Ncube, government registry clerk, is equally dependent on money sent by her husband in Botswana. "My own salary cannot even buy half of what he sends. He sends money every month and that is basically how the family has managed to survive the crisis." Johwa noted that one side effect of remittances was deepening class distinctions. "Those receiving money and goods from the diaspora can afford such luxuries as cars; they can buy houses that are seen as prohibitively expensive in the local context. This is a small but financially sound class that has emerged alongside a growing poor class that can hardly put one day's meal together." Zimbabwe's economy has been in recession for six straight years. Unemployment is over 80 percent and inflation has passed 1,200 percent. The informal sector that supported the livelihoods of the urban poor was crushed by the government in a three-month blitz on the parallel market last year, leaving 700,000 people homeless or out of work. "There are stark differences in terms of access to food, goods and services," said Johwa. "And the reality is that the majority of Zimbabweans are sliding deeper and deeper into hunger and poverty every day." To view the report: www.gprg.org