The World Bank last week released a report which showed that remittances from Ugandans abroad may come in at about $ 773m (sh2 trillion) this year. This is up from $694m last year.
To put this in perspective. Uganda’s national budget stands at just under sh8 trillion, that means Ugandans abroad are remitting the equivalent of a quarter of the national budget to fund school fees, health expenses, building construction and general consumption.
Also this figure is about the same amount of money the government is expecting from foreign governments in loans and grants to balance the budget.
Two things to note, the World Bank acknowledges that this is understated as their statistics are derived from official records. So all the dollars that come stuffed in toys and clothes, through local couriers go largely unregistered.
A recent Central Bank survey on the issue showed that remittances through alternative means were about half the amount of those through the formal financial system.
And secondly, that this figure has been growing over the years, more than quadrupling from 1996’s $175m, shrugging off the recent global economic slowdown. At this rate Ugandans will double there remittances every seven years.
It is estimated that there are about 757,000 Ugandans living abroad, given this year’s statistics this suggests that on average each Ugandan abroad sends home just over $1,000 a year.
As indicated earlier, this money comes piecemeal and according to official statistics peaks in the last quarter of every year. This money goes largely towards consumption.
On the continent Nigeria is the top remittance receiver at $10b but elsewhere India, Israel and Phillipines are up there.
All indications point to the expectation that Kyeyo money will increase year on year as long as a stable macro-economic policy environment is maintained in this country.
Seeing as we shall be getting increasing amounts of these monies in coming years the question is how can we make maximum use of these funds beyond improving individual homesteads’ welfare?
For starters we need to aggregate this money. A few dollars here a few dollars there can’t make countrywide differences.
Ghana in 2008 launched the Golden Jubilee Savings Bond, which raised less than the intended target and most of it from Ghanaians at home. The funds from the bond were intended for infrastructural development. The Philipines is also planning there own bond issue.
Say that we were able to rope in a tenth of this year’s remittances about sh200b what could this money do if deployed in bursaries, low income housing or agricultural credit?
Somebody was telling me that following a geo-aerial survey to determine our natural resource potential, it was discovered we are seating on so much mineral deposits that were we to exploit it, it would mean relocating the whole population of Uganda.
I also learnt that of all the money in circulation about 60% of it is outside the formal financial system.
An increase in branch networks and proliferation of Savings & Credit Cooperatives (SACCOs) should go someway to mopping up all this excess liquidity.
Again you want as much money as you can in the financial system so it can be deployed to support trade and production.
Given also that about sh300b annually gets pilfered by our grubby fingered officials – except in 2007 when sh500b went on CHOGM alone, there is more than enough money available to relieve our donor dependency.
It may come as a surprise to you, but we are not a poor country. In fact it is a fallacy --. A misleading notion, an erroneous belief, a myth.
What we lack is the leadership to harness our local resources. It is much easier to go begging bowl in hand to donors than it is to set up the system to collect our little monies. But that is short term thinking which is hurting us now and will continue to hurt us over the long time if we do not snap out of it.