Uganda targets diaspora billions for investment under new policy

KAMPALA: The Government of Uganda is finalising a National Diaspora Policy that seeks to channel billions of dollars sent home annually by Ugandans abroad into structured investments while strengthening protection for migrant workers facing exploitation overseas.

The policy, expected to be completed in the 2026/27 financial year, is part of a broader strategy to transform diaspora remittances from largely household support into investments that contribute directly to economic growth.

Officials at the Ministry of Foreign Affairs say the framework will focus on directing remittances into priority sectors such as agribusiness, information and communication technology, tourism and real estate.

According to government estimates, Ugandans living abroad remit more than $2.5 billion (about Shs9 trillion) annually, making diaspora inflows one of the country’s largest sources of foreign exchange.

Permanent Secretary in the Ministry of Foreign Affairs Vincent Bagiire said the policy is also intended to address persistent concerns about the welfare of Ugandans working abroad.

“We need a law that clearly articulates how externalised labour is managed. Many Ugandans are sent abroad without sufficient safeguards. Once recruitment companies receive their money, they walk away from the worker,” Mr Bagiire said.

“We continue receiving reports of Ugandans dying abroad, while many others remain stranded in shelters or face exploitation,” he added.

The ministry says the policy will establish stronger legal frameworks and bilateral labour agreements to protect Ugandans working overseas, particularly in countries where cases of labour abuse have been reported.

Complaints documented by government agencies include physical abuse, denial of medical care, withholding of salaries and travel documents, and unexplained deaths.

The proposed framework also seeks to lower the cost of sending money home. According to the Bank of Uganda, remittance charges average about 15 percent, significantly above the global average of 6.5 percent and the United Nations Sustainable Development Goal target of three percent.

Government is exploring partnerships with the Bank of Uganda and financial institutions to reduce transfer costs and introduce Diaspora Bonds that would allow Ugandans abroad to invest securely in national development projects.

The policy will further support diaspora mapping and registration initiatives, including the One-Stop-App and National Identity Card renewal programmes, to create a comprehensive database of Ugandans living abroad.

Officials say the database will help government tap into the skills, knowledge and expertise of the diaspora through targeted knowledge-transfer programmes.

According to the 2024 National Population and Housing Census, about two million Ugandans live and work abroad, mainly in the Middle East, Europe, North America and neighbouring East African countries.

Recruitment agencies have welcomed the policy, saying it could help streamline labour migration and eliminate illegal operators.

Winnie Catherine Banura, Secretary General of the Uganda Association of External Recruitment Agencies (UAERA), said stronger government oversight was necessary.

“The Philippines has sustained its labour export industry for decades because of strong government involvement. Labour migration should not be left entirely to recruitment companies,” she said.

The policy comes shortly after the launch of the National Migration Policy, which aims to maximise the economic benefits of migration while improving protection for migrant workers.

Government’s Fourth National Development Plan targets an increase in remittances as a share of Gross Domestic Product from 2.6 percent in 2023/24 to 5.6 percent by 2029/30.

The new diaspora framework also aims to register at least 300,000 Ugandans abroad on a national diaspora database by 2028.

However, recent figures from the Ministry of Finance indicate that remittance inflows remain vulnerable to global economic shifts. Monthly remittances declined by 23 percent from $248.8 million in February to $191.6 million in March, largely due to lower inflows from the United States.

The United States, United Kingdom, Saudi Arabia, United Arab Emirates and Canada remain Uganda’s leading sources of remittances, with much of the money supporting families back home.