22 August 2014

Uganda: Census to Reveal Exact Figure of Remittances

Bank of Uganda has said it would use the coming census to determine the number of households that receive money from relatives and friends in the diaspora.

Dr Adam Mugume, BOU's executive director for research, told reporters last week at the central bank's offices that the census would give them a clearer picture of how much a particular household received in a given period. Also, they will be able to tell what the recipient spent the money on.

"There is going to be a questionnaire to tell for how long, and how much they [households] have been receiving from abroad," Mugume said.

Today, it is estimated that households receive about $800m approximately. Shs 2.1tn) annually from their relatives and friends abroad. This figure could be much more given that some of the money received could go undocumented. The national census is to be carried between August 28 and September 2.

In 2011 and 2012, there was a slight fall in remittances, according to a 2013 financial stability report by the central bank.

"Growing unemployment situation in the Euro zone area has led to a decline in the value of remittances sent to Uganda," the BOU report read in part.

It added: "Therefore, a downturn or slow recovery in the Euro zone could negatively affect Uganda's financial flows."

But as the economies in the West recovered, the remittances shot up in 2013, reaching $800m, according to the 2014 African Economic Outlook report by the African Development bank (AfDB). It is projected that Ugandans living abroad could transfer as much as $1 billion in 2014.

The World Bank recently said households could do better with that money and use it in income-generating activities, which could help boost earnings. WB says banks should design products for recipients of remittances. If this is done, it is likely that the portion of remittances saved and invested would grow from current levels, the World Bank says.

Meanwhile, Mugume said remittances were neither falling nor increasing.

"We haven't seen a lot of movements in diaspora remittances on a monthly basis.

[Perhaps] in October, we could see some changes,' Mugume said

Diaspora remittances are critical to the livelihoods of recipient families back home because they help in meeting basic needs.


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