Kampala: Dr David Kihangire, the Bank of Uganda executive director, has said Uganda will this year receive Shs2.2 trillion up from Shs1.7 trillion received last year from Ugandans working abroad. 'Projections show that remittance in 2010 will amount to $980.9 million (Shs2.2 trillion)' Dr. Kihangire said yesterday at a conference aimed at encouraging Ugandans in the Diaspora to invest back at home.
He attributed the increase to the number of Ugandans going to work abroad and the fact that majority at work, have not lost their jobs despite the global recession in the last two years.
A report by the World Bank; 'Migration and Remittances Factbook 2011' released in November attributed the increase in remittances to the global economic recovery, which has resulted into job stability and new jobs for millions of immigrants from developing countries.
Globally remittances are expected to reach $440 billion up from $416 billion in 2009 according to the report. 'Remittances help in time of crisis and distress. Remittances impact on poverty and welfare through a multiplier effect,' Dr Kihangire told participants at the 4th annual Diaspora Home is the Best Summit in Kampala yesterday.
Most of those working abroad send home money to friends and relatives for education and health purposes with little going to investment activities according to BoU.
The remittances mainly originate from Europe and America according to a recent BoU survey. 'In Uganda, 50 per cent of remittances recorded have been used for education and health expenses. 40 per cent is attributed to savings and investment while 10 per cent goes to social activities,' he said.
Mr Moses Wilson the President, of the Ugandan North American Association, (UNAA) said there would be more remittances going to investment activities in Uganda save for the untrustworthy friends and relatives who mismanage the money. 'Stories abound of significant sums of money remitted by individuals to trusted friends and family members for investment projects that never materialise,' he said in a speech read on his behalf by Mr Edriss Kironde, a member of the UNAA board of directors.
To encourage the use of remittances for investment, Mr Kironde, called upon the government to fairly distribute investment incentives to both Ugandan and foreign investors instead of favouring the latter. But Mr Aston Kajara the minister of state for investments said government treats all investors alike. 'The incentive regime is non-discriminatory. All investors can access the same incentives at the same levels of investment,' he said.
Dr. Maggie Kigozi, the executive director of the Uganda Investments Authority said the government gives away incentives including land, and tax breaks on investments and imports among others. 'We have incentives that we give to Uganda projects regardless of where you come from, as long as you register your company at home.'