Are Uganda’s diaspora remittances equivalent to 5% of the country’s economy?
Is the total amount of money that Ugandans abroad send home equivalent to 5% of the country’s economy?
At the 2018 Uganda North America Association (UNNA) Convention and Trade Expo held from August 30 to September 2 2018 in Seattle, Washington, Uganda Ambassador to the US, Katende Sebujja, noted that the global Ugandan diaspora contributed $1.4 billion to the country’s economy in 2017, with Ugandans in North America sending home more than $100m in remittances.
Diaspora remittances are a key source of foreign exchange for developing countries, which use the inflows from trade and investment to support their economies.
Uganda is facing rising levels of public debt given the recent increase in borrowing to support infrastructure projects, as well as putting measures such as the mobile money tax and the tax on social media and Over The Top (OTT) services such as WhatsApp.
While these measures have led to political unrest and could cost the economy hundreds of millions of dollars, diaspora remittances offer a steady source of foreign currency inflows that could provide an alternative source of income for the country.
So, the question is, are remittances from Ugandans in the diaspora equivalent to 5% of the country’s economy?
PesaCheck has researched the issue and finds that Ambassador Katende Sebujja’s statement is TRUE for the following reasons:
Central banks often find it challenging to separate overall private capital flows from remittances. Money sent home by citizens abroad often gets mixed up with other small-value transfers such as trade payments, small investments, and even transfers by and to non-governmental organizations and embassies.
The Bank of Uganda’s preliminary data on remittance shows that Ugandans abroad sent US$1.239 billion home in 2017. World Bank data on Ugandan remittances is slightly higher, showing 2017 migrant remittance inflows at $1.375 billion.
The disparity could be because the Bank of Uganda data is still preliminary and yet to be updated with actual survey data.
In his budget speech for the fiscal year 2018/19, Uganda’s finance minister Hon. Matia Kasaija noted that the total value of the country’s economy is now UGX101.8 trillion, equivalent to $27.9 billion, meaning that the US$1.4 billion in remittances that Ambassador Sebujja indicated is equivalent to 5% of the country’s economy.
That means that Ambassador Katende Sebujja’s claim that remittance from the diaspora is equivalent to 5% of Uganda’s economy is TRUE.
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This report was written by PesaCheck Fellow Emma Laura N. Kisa, a Ugandan data journalist and multimedia specialist, and edited by PesaCheck managing editor Eric Mugendi. The infographics are by Eunice Magwambo, a Kenyan graphic designer, visual artist and digital content producer.
PesaCheck, co-founded by Catherine Gicheru and Justin Arenstein, is East Africa’s first public finance fact-checking initiative. It seeks to help the public separate fact from fiction in public pronouncements about the numbers that shape our world, with a special emphasis on pronouncements about public finances that shape government’s delivery of so-called ‘Sustainable Development Goals’ or SDG public services, such as healthcare, rural development and access to water/sanitation. PesaCheck also tests the accuracy of media reportage. To find out more about the project, visit pesacheck.org.
PesaCheck is an initiative of Code for Africa, through its local Code for Uganda chapter, with additional support from the International Center for Journalists (ICFJ).
