Uganda diaspora remittances fall by $233m in 10 months

Uganda Investment Authority (UIA) boss, Dr. Maggie Kigozi.

By The Citizen Correspondent

In Summary

Bank of Uganda attributed the decline to slower economic growth, especially in countries where Uganda receives considerable amount of private capital inflows.

Kampala. Private capital remittance sent by Ugandans in the diaspora dropped by $233 million (about Sh646.1b) in the first 10 months this year, a reflection of weak external environment.

Bank of Uganda attributed the decline to slower economic growth, especially in countries where Uganda receives considerable amount of private capital inflows.

“Between January and October 2014, about $736m (about USh2 trillion) was received by Ugandans in form of personal remittances. Compared to what was remitted in same period of 2013, this was lower by about $233 million,” the executive director research Bank of Uganda, Dr Adam Mugume, told Daily Monitor in an interview at the weekend.

Last year’s remittances were $873 million (about USh2.4 trillion).

Dr Mugume said the decline reflects the weak external environment, especially in Europe, South Africa and South Sudan which are the major sources of remittances into Uganda.

Private capital remittances play a big role in Uganda’s economy in terms of increased flow of foreign exchange and high economic growth.

Dr Mugume said Uganda is likely to receive $900m (about USh2.4 trillion), in private capital remittances for this year, which reflects weak growth. He said recovery in global economic activity remains fragile as Japan fell into recession in the third quarter of 2014 and activity in the Euro Zone remains unresponsive to the European Central Bank’s stimulus.

Dr Mugume said support only came from the US where economic growth is high at 5 per cent, UK 2.6 per cent and a few Emerging Markets Economies of China with growth rate of 7.3 per cent and India with growth rate of 5.9 per cent.

In October, the International Monetary Fund revised its global growth forecast downwards to 3.3 per cent in 2014, from 3.4 per cent projected in July.

In related development, in November, the Economic Intelligence Unit revised the global growth forecast down to 3.1 per cent for 2014, from 3.2 per cent projected in September.