Uganda’s 2016 remittance estimates increase, says BoU

Kampala. Ugandans living and working in the diaspora’s remittances back home increased by 16 per cent last year, defying the deplorable state of the global economy.
According to records from Bank of Uganda, in 2016, personal transfers are estimated to have increased to more than $1.2 billion (Shs4.3 trillion) compared to about $1 billion (Shs3.6 trillion) transferred in 2015.
Mr Stephen Kaboyo, the managing partner at Alpha Capital-a foreign exchange firm, responding to the estimates, said: “The improvement in remittances suggests that Ugandan’s in the diaspora have defied the deplorable state of the global economy to send more money home.”

One of such global turbulences was Britain’s exit (Brexit) from the European Union which sent shock waves to the global financial system with the US dollar gaining substantially while leaving the Euro and Pound sterling devalued.
This spilled over into the domestic market, with the Uganda Shilling depreciating.
Although the United Kingdom (UK) uses the Pound, most transactions are in US dollars, so the dollar gained value in UK forcing currencies of economies that trade with UK to depreciate.

Source of the revenue
Dr Adam Mugume, the executive director, research and policy at Bank of Uganda, in an interview with Daily Monitor said: “Uganda’s source of this revenue largely remained the same.”
Private capital remittances play a big role in Uganda’s economy in terms of increased flow of foreign exchange and high economic growth.
Uganda’s remittances mainly comes from the UK, USA, Europe, United Arab Emirates, South Africa and Japan.
Mr Kaboyo added that this performance is also attributed to the fact that the coming in of mobile money transfers has lowered transaction costs making it cheaper and efficient to send money across borders.

During the annual Diaspora Summit held in December last year, Uganda North America Association President Monday Atigo said their (diasporans) are being looked as an asset and cornerstone in achieving the country’s middle income economy.
“But we get frustrated with the bureaucratic hurdles and processes of getting access to services and information,” he said.
He called on the government, through the Uganda Investment Authority, to help those in the diaspora on which projects and opportunities they can develop.

Trends
Early last year World Bank (WB) data indicates that the East African states received $3.5 billion (Shs11.5 trillion) in remittances in 2015 with Uganda’s remittances growing fastest in the region at 21 per cent.
According to the WB, Uganda posted the highest growth in remittances with 21 per cent, receiving over $1.1 billion (Shs3.6 trillion).
Remittances to Uganda went up despite a mid-year prediction by Bank of Uganda of a $233 million (Shs777b) drop due to the tough economic environment the country was facing at the time.
Uganda posted the highest growth at 21 per cent, receiving over $1.1 billion (Shs3.6 trillion), followed by Kenya with an 8.6 per cent increase, pushing its remittances to $1.54 billion (Shs5 trillion). However, Rwanda’s dropped to Shs514b.

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