Story by Tichaona Kurewa
The SADC Committee of Central Bank Governors (CCBG) meeting took place this Friday in Victoria Falls and resolved to expeditiously work on reducing the costs of remittances in the region and beyond.
The CCBG meeting ended with leaders committing to implement strategies matching international best practices on remittances.
According to a study by the World Bank the corridor between Zimbabwe and South Africa is the busiest and most expensive with the cost of remittances around 13 percent compared to eight percent in other parts of Africa and a global average of eight percent.
“It is very expensive to transmit money between South Africa and Zimbabwe. If you have to transfer a US$100 from South Africa to Zimbabwe, it will cost you just under 13 percent which means that if you are to send US$100 recipient will only receive US$87, worse it takes a number of days before the recipient gets the money. We are now focused on bringing down that cost of remittance. It is important that as central banks we focus on that so that we improve efficiency, we bring down the cost, we include more people and we actually increase the speed with which people access the money that is transmitted across borders,” said Committee of Central Bank Governors Chairperson, Mr Lesetja Kganyago.
Reserve Bank of Zimbabwe Governor Dr John Mushayavanhu weighed in, “Key takeaway from this meeting is the issue we discussed on cross border payment especially payments between Zimbabwe and South Africa which tend to be expensive despite the proximity between the two countries.We agreed as SADC governors that we are going to come up with a framework to reduce the cost of remittances between the two countries Zimbabwe and South Africa and indeed within SADC and across the world. This is the project that we will be implementing.”
Current figures show Zimbabwe receives nine percent of its Gross Domestic Product (GDP) in remittances, with at least six percent received from South Africa.
The Committee of Central Bank Governors (CCBG )was established in 1995 at the initiative of SADC Ministers responsible for national financial matters.
The committee’s primary purpose is to foster closer cooperation among central banks within the region.
Central banks play a pivotal role in promoting financial and economic development by implementing policies that ensure macroeconomic stability.
The CCBG comprises of 16 Governors from the SADC central banks.
Its areas of focus include; developing financial institutions and markets, collaborating on international and regional financial relations and coordinating monetary, investment and foreign exchange policies.
