[UAH] Go harder, my Kyeyo Bredrens: Uganda’s remittances grow by 14 per cent
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Uganda's remittances grow by 14 per cent
The Uganda Diaspora Event Planner, Mr Ronnie Mayanja and former UIA executive director Maggie Kigozi address journalists in Kampala on Friday. PHOTO BY RACHEL MABALA
Remittances from Ugandans working abroad, locally known as kyeyo, have grown by about 14 per cent annually in the past 10 years. According to a new report by the UN Conference on Trade and Development (UNCTAD)-the Least Developed Countries (LDCs) Report 2012, Uganda's percentage growth in remittances surpassed that of most countries like Mauritania, Comoros, Yemen, Malawi, and Angola.
Giving estimates of the contributions from Bank of Uganda, Uganda Investment Authority, Executive Director, Frank Ssebowa said for the last three years, Ugandans living abroad have been transferring more than $700m annually and projections for 2014 are way over $1 million.
"Ugandans living and working in diaspora who are way over 2.5 million can no longer be ignored but encouraged to take part in the country's investment and trade opportunities," Eng. Ssebowa, said at a press meeting on Friday. The UNCTAD report shows that remittances accounted for about six per cent of Uganda's Gross Domestic Product (GDP) between 2008 and 2010. The percentage has since increased to 25 per cent.
Uganda gets most of its remittances inflows from Kenya ($326m), United Kingdom ($176m) and US ($87.4m). The three countries provide 76 per cent of Uganda's total earnings from remittances, according to the report.
The report also says almost half of the international remitting emigrants are high-skilled, accounting for two-thirds of total remittance flows to the country.
With 100 per cent annual growth in remittances, Burundi leads the list, followed by Sierra Leone and Guinea. Burundi gets most of its remittances from Tanzania ($8m in 2010) and Uganda ($5m) followed by Belgium ($3m).
Rwandans living in Uganda send about $25m back home every year, making Uganda the main source of Rwanda's remittances. The report shows that the share of international remittance income spent on health and education in Uganda ranged between 10 to 32 per cent.
"Accordingly, remittances are typically found to improve health and education outcomes, even though the absence of a migrant family member may to some extent erode part of these benefits." In the last decade, remittances have been central to the economy, having surpassed coffee, which only fetched $348m in 2008, as a foreign exchange earner.
Remittances
The UNCTAD report also shows that remittances have surpassed foreign direct investments (FDI) in Uganda. However, discussing the report recently, economists expressed mixed feelings about the high rate of brain drain in the country, albeit with increased remittances.
They also decried the 'high and prohibitive' cost of formal remitting in less developed countries which is close to 12 per cent of the total amount being remitted compared to the global average of 9 per cent.
For remitters sending from the UK to Uganda, the average cost is lower than from Tanzania, at 8 per cent and 12 per cent respectively. This has forced many remitters to send their money through informal avenues which experts say is detrimental to the economy.
UNDP's senior economist Alex Warren Rodriguez urged the government to encourage the public to put the money from remittances to better use to spur the country's development.
Posted Sunday, May 19 2013 at 01:00
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