Money sent by Ugandans abroad recovers from Covid-19 decline
Remittances remain one of the largest sources of Uganda’s foreign exchange. PHOTO | FILE
What you need to know:
- During the period ended December 2021, according to Bank of Uganda, money sent by Ugandans working abroad increased by 3.52 percent, recovering from a 2.8 percent decline in 2020.
Ugandans working abroad sent more money home in the period ended 2021 than in 2020, according to data from Bank of Uganda.
In details contained in the Annual Supervision Report, released early this month, Bank of Uganda said remittance inflows increased from $579m during the year ended December 2020 to $599.3m in 2021, which was a 3.52 percent recovery from a decline registered in 2020.
During 2020, according to the Migration and Development Brief, remittances to Uganda declined by 2.8 percent.
The Migration and Development Brief indicates that Uganda remains among the top 10 recipient of remittances in sub-Saharan Africa.
Dr Adam Mugume, the Bank of Uganda director for research yesterday told Daily Monitor that North America, Middle East and South Africa are Uganda’s largest sources of remittances.
“2021 was a year of recovery when compared to 2020. But when compared with the 2019 inflows, remittances in 2021 are still lower,” he said, noting that the 2021 recovery was supported by the gradual reopening of global economies as Covid-19 waned.
It was not immediately clear how much is sent from the above mentioned source regions.
However, North America, which includes US and Canada, has one of the highest concentration of Ugandan professional workers that are supplemented by a mix of casual labourers.
However, in the last 10 years, many of the workers that Uganda sends to the Middle East have been concentrated in casual employment.
The number of Ugandan migrant workers has been growing boosted by labour externalisation programme with a number of countries, especially in the Middle East.
According to a report by the Ministry of Gender, it is estimated that at least an average of 24,086 Ugandans leave the country annually in search of employment, especially to the Middle East.
However, many of these are employed in casual employment, even as they have been key in boosting remittance inflows in the last 10 years.
A United Nations report estimates that there are at least or more than 620,000 Ugandans living and working outside the country with key regions being East Africa, Africa, Europe, Asia, Americas and Middle East, among others.
Dr Fred Muhumuza, an economist and a lecturer of economics at Makerere University, said the recovery and increase in remittances is good for the economy because they come at a time when the shilling is facing serious pressure due to an increase in demand for dollars against low supply.
“We need the dollars, but most importantly these feed directly into households of the emigrant workers many of which are very fragile and vulnerable and hence support the local economy at the grassroots,” he said.
In the last three years, remittances have been impacted by a number of factors, among which include slowdown in the global economy, Covid-19 and surge in commonalty prices.
Outflows
Whereas inflows increased, on the other hand, outflows, which represents money to expertriate and foreign workers, according to Bank of Uganda decreased by 3.85 percent, falling from $213.8m during the period ended December 2020 to $205.59m in 2021.
