A number of studies by academics, scholars and researchers have been conducted on the subject of remittances. The focus of these studies has been on developing countries where remittance corridors have long been established. These studies have focused more on the effects of remittances at micro level, in other words poverty alleviation as result of the decline of FDI; PI and ODA. Established remittance corridors are found in Asia, the Pacific Rim, the Middle East, South America, the Caribbean, West Africa as well as North Africa. Few studies have been conducted into new emerging corridors that are still being established, such as the South Africa-Zimbabwe, Botswana-Zimbabwe and the Namibian-Zimbabwe corridors where a large number of Zimbabweans have migrated to. Economic growth and development are major challenges facing developing countries due to lack of finance. With the decline of FDI, PI, ODA as well as credit since the global financial crisis in 2008, there is a need for research to determine other alternative sustainable sources of finance to enable economic growth and development. Available literature and empirical evidence on the subject matter suggest remittances as a complementary source not a substitute of FDI, PI, ODA and credit. This means that governments in developing countries should not neglect their duty to collect revenue, should promote FDI and PI and not be dependant solely on remittances. Like FDI, PI and ODA, the flow of remittances is also determined by the socio-economic and political factors. Any negative effect on the socio-economic and political factors may also lead to the decline of remittance flows. Whilst other developing countries in established remittance corridors have put policies and systems in place to harness and ensure maximum benefits of remittances, countries such as Zimbabwe have not done much to realise potential and the impact that remittances can make. This is evidenced from the lack of reliable data which according to Chami et al. (2008:21) places severe constraints on the types of questions that can be asked and conclusions that can be drawn from statistical analyses. Secondly, emigration from Zimbabwe can be regarded to be in its infancy stage compared countries like Nigeria and Egypt where migration to developed countries has reached maturity stage. The evidence of this is seen on the volume of remittances currently being received by these two countries. Therefore, this study will complement existing data and literature available particularly on this corridor. Remittances are channelled either through formal or informal channels. The literature available and empirical evidence suggests that the bulk of remittances are channelled through informal channels as opposed to formal channels (Crush et al.,2012:20). Within the South Africa-Zimbabwe corridor, 85 percent of remittances to Zimbabwe are channelled informally (von Burgsdorff, 2012: 17) and are not captured in the official statistics such as the Balance of Payments. The drawback of this is lack of accurate data which precludes more rigorous statistical analysis in this field (von Burgsdorff, 2010:12). This study will endeavour to capture valuable statistics with regards to remittances. Most developing countries that have relied on aid are also burdened with huge unsustainable external debts (Obasanjo, 2000). The external debts continue to have an adverse effect of slowing down economic growth and development as these countries have an obligation to pay back the debts. Settling of external debts has been one of the biggest challenges facing developing countries. With the rise of remittances, Olubiyi (2013:1) sees them as a replacement to credit to a country that is constrained. Instead of borrowing finance for growth and development, remittances can be used instead. Apart from substituting credit with remittances, countries which are not burdened with external debts are able to use remittances as a leverage to obtain foreign loans (Taylor, 1999:69). The loans acquired can used for supplementing revenue derived from the fiscus and other sources of external finance such as FDI, PI and ODA.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nmmu/vital:22785 |
| Date | January 2016 |
| Creators | Gadzikwa, Francis |
| Publisher | Nelson Mandela Metropolitan University, Faculty of Business and Economic Sciences |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis, Masters, MPhil |
| Format | 98 leaves, pdf |
| Rights | Nelson Mandela Metropolitan University |
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