Document Type

Migration Policy Series

Publication Date

2023

Department

Balsillie School of International Affairs

Abstract

This report sets out to test the conflicting global and local narratives about the impact of COVID-19 on remittance flows in the South Africa-Zimbabwe migration corridor. Remittance pessimism vanished during the second year of the pandemic as data indicated that remittances had not suffered the predicted collapse. Given survey findings, including the survey reported on here, about the depressed earning and remitting capacity and behaviour of migrants during the pandemic, there was no obvious explanation as to why remittances had not plunged in 2020. In search of a resolution to this pandemic paradox of stable or increased migrant remittances and decreased migrant capacity to remit, a narrative has emerged that emphasizes the distinction between formal (recorded) remittances, which are captured in IMF and World Bank data, and informal (unrecorded) remittances, which are not. In many parts of the Global South, including in the South Africa-Zimbabwe migration corridor, informal remittance channels and volumes have been more important than formal ones. Zimbabweans in South Africa continued to use informal channels after COVID-19 hit, but mobility restrictions partially blocked these channels. Migrants increased their use of formal channels and there was a significant shift towards digital remittance services. Thus, the COVID-19-related increase in remittances captured by the reserve banks was, at least in part, a product of a shift from informal to formal remitting. Whether the COVID-19 crisis has been a permanent boon to formal money transfer operators and digital remittance service providers or whether migrants will revert to informal channels post-pandemic remains to be seen.

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