Remittances to Uganda last year grew to $1.21 billion, boosted by receipts from labour exports to Middle Eastern countries, which over the years have grown to eclipse some of the traditional remittance sources, preliminary data from the central bank shows.
Dr Adam Mugume, executive director of research at the Bank of Uganda told The EastAfrican that remittances from the Middle East are rising while receipts from regions that were traditional sources of transfers have dropped due to troubled economic conditions.
“Out of the $1.21 billion, more than half are remittances from the Middle East,” said Dr Mugume.
But this figure, he added, represents stagnation” in remittances due to weak receipts from elsewhere, especially European countries.
“We note that remittances from Europe are still weak the same goes for Southern Africa and South Sudan, which have greatly declined,” he added.
Bank of Uganda officials say this data is based on figures reported by money transfer operators in the first 11 months of 2018 and estimates for December, which reflect an improvement of 4.1 per cent on the previous year’s receipts.
The central bank says estimates for December 2018 alone were $227.9 million.
BoU survey done last year to establish the total value of transfers into the country showed that Uganda earned $1.16 billion in 2017.
According to BoU, remittances from the Middle East have gained the most compared to Europe, North America, southern Africa and South Sudan.
“Middle East remittances gained the most and this can be attributed to the growing number of Ugandans moving to that region in search of work. The biggest drop was reported for North America,” added Emmanuel Ssemambo, senior banking officer in charge of statistics at BoU.
Mr Ssemambo said that in the survey data for 2017 and 2016 complied by BoU from reports of money transfer operators, the Middle East accounted for about 25 per cent, ranking second after Europe, with North America coming in third place.
However, according to preliminary data for 2018, Middle East receipts continued to gain while those from the other regions declined.
This gain is in spite of the policy that has seen many Ugandans recruited to work in the Middle East remaining embroiled in controversy over allegations of extortion, human trafficking, violation of labour immigrants’ rights and irregular recruitment.
Under the Labour Externalisation Policy, the Ministry of Gender, Labour and Social Development has since 2015 moved to regularise the movement of labour that has seen the movement of at least 70,000 Ugandans to the United Arab Emirates, Saudi Arabia, Jordan, Bahrain, Oman, Iraq, Qatar and Afghanistan.
But while the majority of labour exports are properly recruited through the 96 licensed companies, there are an estimated 20,000 to 30,000 Ugandans who according to security agencies, are recruited through illegal agencies.
Initially labour exports to the Middle East started at the end of the Iraq war that ousted Saddam Hussein, when American companies sought workers from developing countries to work as security guards for key US military installations and personnel.