Remittances are expected to suffer massively as the world struggles to shake off the corona pandemic.
According to data from Bank of Uganda, half of Uganda’s remittances is generated from the Middle East, where the country has an estimated workforce of 150,000 people.
A 2018 World Bank report indicates that Ugandans from the diaspora remitted $ 1.4b in 2017 with a decline to $1.3b in 2018.
The amounts translate to about 5 per cent of Uganda’s gross domestic product of $27.9b.
However, the current crisis resulting from Covid-19, experts say, will not only eat into remittances but employment as well.
Mr Ramathan Ggoobi, a Makerere University Business School lecturer and economist last week said: “Covid-19 has battered economies where [most Ugandans in the diaspora] are working. There is no way we should expect remittances and portfolio investments as the world is on a wait and see mode.”
On his part, Mr Stephen Kaboyo, the Alpha Capital managing partner, said: “The possible downturn in remittances will have a severe impact on overall consumption in the economy,” noting the broader effect will be depressed growth.
In his February monetary policy statement, Bank of Uganda Governor Emmanuel Tumusiime Mutebile had predicted growth in domestic product but noted that downside risks resulting from both global local and global scene, especially in regard to Covid-19, would lower growth to near-term growth outlook.