By KT Reporter
Inflows from Ugandans based outside the country increased to 1.4 Billion Dollars or about 5 Trillion Shillings, a head of tourism or coffee earnings, signifying the importance to the economy.
However, this remains low according to the country’s estimated potential, and the banking industry says the value of diaspora remittances can grow 10 times to 14 Billion Dollars (50 Trillion Shillings in current foreign exchange rates) in 15 years.
The Uganda Bankers’ Association (UBA), says even at the current levels, the money has a bigger capacity to transform the economy in general and the livelihoods of Ugandans in particular if well harnessed, hence the theme “Harnessing the Potential and Maximizing the Impact of Remittances on Development” for the upcoming 8th Annual Bankers Conference on July 29 in Kampala.
“Remittances are not just transfers of money; they are powerful drivers of development, directly impacting the lives of millions of Ugandans in poverty alleviation by enhancing access to essential services like healthcare and education for many families, as well as other sectors like real estate and as such contributing significantly to our national economy,” Julius Kakeeto, UBA Chairperson, says.
The conference is organised in collaboration with the Bank of Uganda, the International Fund for Agricultural Development (IFAD) and the title sponsor Mastercard.
The conference, a flagship event for UBA, is expected to bring together players in the industry, including labour export agencies, policymakers, legislators, financial institutions, regulators, development organisations, the private sector, academia, and civil society organisations, among others.
It is aimed to “foster thought leadership and actionable strategies on leveraging the significant potential of remittances for Uganda’s sustainable socio-economic development, and provides a crucial platform for all stakeholders to collaboratively explore innovative solutions and best practices to ensure these flows contribute even more effectively to our country’s growth and development,” says Julius Kakeeto, UBA Chairman.
Kakeeto says that now accounting for 3 percent of the value of the economy, the importance of remittances to Uganda is the reason why there is a need to put measures in place to ensure it is well-utilised.
“Remittances, which now account for, have emerged as a critical financial lifeline for many low-income families in developing countries, often surpassing foreign direct investment (FDI) and official development assistance (ODA) flows.”
In Africa, Egypt leads with the highest annual remittance flows at 24.2 Billion Dollars, followed by Nigeria at 20.5 billion and Morocco with 12.1 billion, while in East Africa, Kenya tops with 4.4 billion.
Ugandans working outside the country are estimated to number 2 million, way over the total number in the civil service, and this number continues to grow, with labour export to the Middle East, Asia and other parts of the world estimated at more than 110,000 per annum.
The UBA Chairperson further noted that despite their immense contribution, maximising the benefits of remittances at a macro level is yet to be fully exploited. Wilbrod Owor, UBA Executive Director, says the remittances industry’s complex nature needed to be understood to plan for it effectively.
He says, for example, that the Middle East has more people sending money back home and more frequently, though in smaller bits, while the US and UK and other Western countries may have fewer by with larger amounts.
While the US, UK, Canada, Kenya, South Africa and in recent years, the Middle East have been the main destinations of Ugandans, he says countries like Sweden are also becoming as important, meaning that Ugandans are all over the world, according to Owor.
Uganda is currently pursuing an ambitious tenfold GDP growth plan aimed at 500 Billion Dollars by 2040, and financing strategies for this growth is a key discussion item for the much-needed infrastructure and other development enablers.
The one-day conference will, among others, focus on the economic impact of remittances on growth and development and their role in poverty alleviation and financial stability.
It will also focus on how technological innovations are shaping the future of Remittances, addressing challenges and risks in the remittance ecosystems, including identifying and mitigating risks such as fraud, currency volatility, and geopolitical factors that threaten the reliability of remittance flows and sustainability of remittance networks. Owor says every country should have frameworks that ensure that money coming in is safe and only for good intentions, and that the conference will also discuss how to mitigate such risks.
Another discussion will be the role of financial institutions in harnessing the potential in remittances, focusing on products, services, regulatory frameworks, policy interventions, and other enablers that can unlock the full potential of remittances.
Shehryar Ali, Senior Vice President and Country Manager for East Africa and Indian Ocean Islands at Mastercard, emphasised the importance of digital transformation in developing the remittances industry.
“We set new standards for payment technologies, enabling faster, more secure payment flows that meet the evolving needs of our customers. Together, we can unlock the full potential of global money transfers as a catalyst for long-term development and financial inclusion.”-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
