What you need to know:
- East Africa, Kenya the region’s biggest economy recorded the highest remittances of $1.970b (Shs7.2 trillion) up from $1.745b (Shs6.4 trillion) in 2016.
- Mr Mugume said certainly Kenya is a large country and has many people working in diaspora, especially in the US, Canada and Europe.
Kampala. Middle East labour exports have substantially contributed to the growth of Uganda’s remittance increasing by about 12.4 per cent for the year ending 2017.
According to a World Bank Report released early this week remittances increased to $1.37b (Shs5 trillion) in 2017 up from $1.2b (Shs4.4 trillion) recorded the previous year.
Data from Gender Ministry shows that labour exports to the Middle East, which stood at more than 65,000 in 2017, have largely contributed to the growth of remittances.
Dr Adam Mugume, the Bank of Uganda director for research told Daily Monitor in an interview that a number of workers in the Middle East have been sending money back home thus the growth.
However, he said, the global economic recovery, especially in Europe and the America has had a significant impact.
“That is why we see substantial increase in workers remittances from America,” Mugume said.
Mr Stephen Kaboyo, the lead partner at Alpha Capital, a forex dealer, said the improved performance was on account of an improved global economic outlook, especially in source countries such as US and EU.
Over time, he noted, there had also been a slight reduction in remittances costs as a result of improved technologies.
“Diaspora remittances are a lifeline and for Uganda this amounts to noticeable share of balance of payments and the economy,” Kaboyo said.
The money, according to the World Bank report, which had noted a decline over the last years, is huge source for most low and middle income countries across the globe.
The report notes that more than $466b (Shs1,710 trillion) was received by low and middle income countries in 2017, an increase of 8.5 per cent from the $429b (Shs1,574 trillion) recorded in 2016.
According to the report, the stronger than expected recovery in remittances was driven by growth in Europe, Russian and US.
East Africa, Kenya the region’s biggest economy recorded the highest remittances of $1.970b (Shs7.2 trillion) up from $1.745b (Shs6.4 trillion) in 2016.
Mr Mugume said certainly Kenya is a large country and has many people working in diaspora, especially in the US, Canada and Europe.
Tanzania also saw an increase in remittances from $411m (Shs1.5 trillion) in 2017 to $435m (Shs1.6 trillion) in 2016.
Rwanda received $181m up from $173m recorded in 2016 while Burundi registered $34m up from $31m in the same period under review.