Ten forex bureaus have exited Uganda amid declining profitability occasioned by Covid-19 pandemic, a new report by Bank of Uganda (BoU) shows.

According to the BoU annual report for 2021, while 13 new forex bureaus and 10 (ten) new money remitters were licensed during the year to June 2021, 10 forex bureaus and 4 money remitters permanently exited the sub-sector.

The report attributes this to decline on profitability of the sub-sector occasioned by government of Uganda measures to curb the spread of COVID-19.

“The sector’s profitability decreased by 31.3 percent or UGX 3.8 billion from UGX 12.2 billion registered in the year ending June 2020 to UGX 8.4 billion for the year ending June 2021. On the other hand, total sales of foreign currency amounted to UGX 13.0 trillion during the year while net money remittance inflows for the year amounted to USD 413.9 million,” the BoU report states.

“Once again, the government of Uganda measures to curb the spread of COVID-19, notably the lockdown of business activity in the central business district of Kampala, significantly affected the operations of the sub-sector and several institutions remained closed given their location in shopping malls and arcades,” it adds.

At end of June 30, 2021, the forex bureau and money remittance sub-sector comprised of 210 foreign exchange bureaus with a total of 315 outlets, inclusive of 1 Microfinance Deposit-taking institution (PRIDE MDI) licensed to do foreign exchange business under the Foreign Exchange Act, 2004. The money remitters as at the same date were 85 with a total of 263 outlets, inclusive of 3 Microfinance Deposit-taking institutions (PRIDE MDI, FINCA MDI and UGAFODE) licensed to engage in money remittance business under the Foreign Exchange Act, 2004. Thirteen

The total assets increased by 0.1 percent, from UGX 127.5 billion at end June 2020 to UGX 127.7 billion at end June 2021. Total capital and reserves held by the sub-sector as at end June 2021 stood at UGX 79.8 billion, up from UGX78.8 billion held as at end June 2020.

On the other hand, total sales of foreign currency amounted to UGX 13.0 trillion during the year while net money remittance inflows for the year amounted to USD 413.9 million.

The total value of the investment portfolio for the Money Remittance Fund stood at UGX 9.7 billion as at end June 2021, an increase of UGX 0.9 billion from UGX 8.8 billion as at end June 2020. The Fund’s average quarterly return for the period ended June 2021 was 3.01 percent, mainly driven by positive performance on the fixed income and money market assets.