Uganda’s remittances hit $2.5 billion as digital transfers dominate

KAMPALA. Uganda received $2.5 billion (about Shs9.5 trillion) in remittances in 2025, equivalent to 3.8 per cent of the country’s Gross Domestic Product (GDP), according to new data released by the Bank of Uganda (BoU).

The figures, unveiled at the launch of a new remittance data dashboard in Kampala last week, follow the introduction of an enhanced data collection framework developed in June 2025 in partnership with the International Fund for Agricultural Development (IFAD) and other international organisations.

The new framework provides deeper insights into remittance flows, transaction patterns, and channels used by Ugandans in the diaspora.

According to the data, more than 16 million remittance transactions were recorded in 2025, with an average transaction value of $152. Notably, over 93 per cent of all transfers were below $499, indicating that remittances are largely used to meet basic household needs such as food, education, and healthcare.

The United States remained the largest source of remittances, contributing $702 million (28 per cent) of total inflows. Other key sending countries include Saudi Arabia, the United Kingdom, the United Arab Emirates, and Canada.

Digital channels take lead

The data further shows a significant shift towards digital financial services, with 73 per cent of remittances sent through digital channels, compared to 27 per cent via cash-based international money transfer services.

Mobile money emerged as the most dominant channel, accounting for nearly 61 per cent of total remittance receipts, highlighting its growing role in expanding financial inclusion and access across the country.

Uganda also remained a net recipient of remittances, with outflows in 2025 recorded at $402 million. The main destinations for outbound transfers included India, Kenya, the United States, the United Kingdom, and Canada.

New system boosts data accuracy

Speaking at the launch held at Golden Tulip Hotel in Kampala, BoU Director of Statistics Ms Milly Nalukwago Isingoma said the new system integrates advanced technologies to improve the quality and reliability of remittance data.

“The dashboard incorporates algorithm-driven checks that quickly flag inconsistencies or missing information, allowing teams to respond promptly,” Ms Isingoma said.

She added that the central bank is working towards deeper digital integration, including plans to introduce Application Programming Interfaces (APIs) that will allow financial institutions to connect directly for seamless data sharing.

“This achievement follows sustained collaboration between national teams and IFAD, with continuous engagements to monitor incoming data and identify areas requiring support,” she noted.

Analysts say the move places Uganda among a small number of countries globally that publish detailed remittance data, including corridor-level and channel-level breakdowns, improving transparency and policymaking.

More than just numbers

BoU Deputy Governor Mr Augustus Nuwagaba said remittances should not be viewed merely as financial statistics but as a reflection of the sacrifices made by Ugandans living abroad.

“Remittances are often presented as numbers on a balance sheet, figures to be analysed and reported. But they are not merely statistics. They represent the sacrifices of Ugandans in the diaspora,” he said.

Mr Nuwagaba noted that remittances play a critical role in Uganda’s balance of payments, making accurate measurement essential for policymakers and stakeholders.

He added that the central bank is now integrating both formal and informal data sources, capturing granular transaction-level information alongside broader economic indicators to provide a more comprehensive picture.

Personal story underscores diaspora struggles

In an emotional reflection, Mr Nuwagaba shared his own experience working abroad, underscoring the realities behind remittance flows.

“For some of us, this reality is deeply personal. I have lived it. I have worked alongside fellow Ugandans abroad—cleaning toilets, digging graves, and taking on whatever jobs were available to earn an honest living,” he said.

He added that such experiences highlight the resilience and determination of Ugandans in the diaspora, many of whom support families back home through small but consistent transfers.

Lifeline for households

Officials from IFAD emphasised that remittances remain a crucial lifeline for millions of households.

“Remittances are far more than financial transactions. They support education, healthcare, housing, and small businesses,” said Mr David S. Berno, IFAD’s Remittances and Inclusive Digital Finance (RIDF) officer.

“They strengthen household resilience and sustain local economies, particularly in rural areas. But to unlock their full potential, we need accurate data that informs policy, interventions, and business strategies,” he added.

Government pledges support

Senior Presidential Adviser and head of the Diaspora Unit Dr Hillary Musoke said the government is committed to strengthening engagement with Ugandans abroad and maximising the developmental impact of remittances.

He noted that the diaspora continues to play an increasingly important role in Uganda’s economy, not only through financial contributions but also through skills transfer and investment.

Outlook

With remittance inflows steadily rising and digital channels expanding access, experts say Uganda stands to benefit further if policies are aligned to reduce transaction costs and channel funds into productive investments.

The newly launched dashboard is expected to guide decision-making and provide stakeholders with real-time insights into one of the country’s most important financial inflows.

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