Diaspora Ugandans urge Central Bank to create local remittance app

Ugandans living abroad have renewed calls for the Bank of Uganda to develop a secure, low-cost digital platform for remitting money back home, saying current remittance systems are not only expensive but also erode the value of their hard-earned incomes.

The appeal comes amid growing frustration over high transaction charges imposed by foreign digital remittance apps — fees that often exceed 10 percent of the total amount sent. With Uganda receiving over $1.4 billion in remittances in 2023 alone — the country’s largest source of foreign exchange — the diaspora argues that the current system is long overdue for reform.

Speaking at a media briefing in Kampala ahead of the International Day for Family Remittances (IDFR), Mr. Chris Ssentongo Kironde, a Ugandan-American who has lived in the United States for 28 years, described the current remittance landscape as unsustainable and inequitable.

“The Bank of Uganda should create a locally owned remittance app,” Mr. Kironde said. “It would be cheaper, inspire trust, and eliminate unnecessary fees. Right now, if the dollar rate is 3,700, the recipient gets around 3,600 — that’s a loss of up to $100 or $200 per transaction. Before long, people will return to the old system of sending money in envelopes.”

According to the 2024 National Population and Housing Census, over two million Ugandans reside in the diaspora, spread across the United States, Europe, Asia, South Sudan, and neighboring East African countries. With remittance flows continuing to rise globally — increasing by 4.6% from $865 billion in 2023 to $905 billion in 2024 according to the World Bank — the economic significance of diaspora contributions is undeniable.

Remittances to Uganda account for approximately 3 percent of GDP, supporting critical needs such as food, education, healthcare, and housing. Yet diaspora leaders say the burden of high transaction fees is discouraging people from sending money home — or forcing them to seek informal, less secure alternatives.

“Remittances improve lives. But the high transaction costs are undermining their impact,” said Ms. Sarah Carl, head of programmes and policy development at the International Organization for Migration (IOM). “Globally, the average remittance cost is 7 percent. In Uganda, it can go as high as 15 percent — meaning families lose a significant share of what they’re meant to receive.”

Government officials have taken note.

Mr. Patrick Okello, Commissioner for Refugee Management in the Office of the Prime Minister, warned that the high fees may be pushing some diaspora Ugandans to invest their money elsewhere, resulting in missed opportunities for national development.

“If you’re losing 15 percent of every dollar you send, you may decide to invest abroad instead. That’s a real risk for a country like Uganda, which relies on remittances to fund family welfare and economic growth,” he said.

In response, the Bank of Uganda says it is exploring ways to drive down remittance costs through increased market participation and competition.

“We are taking concrete steps to enhance the development impact of every dollar sent,” said Ms. Constance Kababi, Deputy Director of Statistics at the central bank, representing Governor Michael Atingi-Ego. “More market players will mean more competitive pricing, and that will ultimately reduce costs for users.”

Mr. Kironde believes that if Uganda can streamline and localize its remittance infrastructure, it will not only ease the burden on existing diaspora workers but also encourage more Ugandans to seek overseas employment — potentially increasing remittance volumes and long-term investment in the country.

“India has done it. Uganda can too. If we get our people jobs abroad and support them with secure, affordable remittance systems, development will follow.”

The International Day for Family Remittances (IDFR) will be celebrated on June 16, under the theme: “Remittances Financing Development.”