Remittances in rural Zimbabwe: From consumption to investment?

When remittances become widespread and stable in a rural village, they adopt a critical role in supporting local development. They contribute via the promotion of businesses and employment. Productive consumption creates opportunities for investment in growth oriented SMEs, whether their owners are receivers of remittances or not. This study used an ethnographic technique to “follow the money”, consisting of recording several rounds of transactions in a village in rural Zimbabwe after the reception of cash from abroad. In this paper we argue that remittances contribute to local development in Ward 2, Tsholotsho district in diverse ways. These include promotion of micro-enterprises and employment generation in fishing, brick moulding, fetching firewood, building and weeding, among others, that non-receiving households offer receiving households for a fee. The study concludes that, through remittances, households’ livelihood security is increased, albeit differentially. Receivers form a consumptive class with limited motivation to run new businesses and mainly focus on upgrading existing agricultural activities. Non-receivers form the pool of the labour available to be engaged by recipients when they need to hire extra labour at low wages and working conditions.

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