Why Uganda’s kyeyo cash continues to flow
Jul 26, 2010
IN his state-of-the-nation address in June, President Museveni announced that remittances from Ugandans living abroad rebounded in the period July to December 2009 at about $76m per month, from $39m in January to June 2009.
REPRESENTING UGANDA ABROAD
By Shamilla Kara
IN his state-of-the-nation address in June, President Museveni announced that remittances from Ugandans living abroad rebounded in the period July to December 2009 at about $76m per month, from $39m in January to June 2009.
This was amid the global crisis that severely hit countries in which the remittances came from.
What sparked the hike?
“The reasons as to why Ugandans still send money even when there is economic stress in the host countries are the same reasons they send money when the economy is healthy,†says Joe Kazinduka, a New York-based finance manager.
“The needs of our people do not diminish because of the bad economy, maybe to the contrary,†Kazinduka says.
The rise in remmitances happened in the latter half of 2009, where, according to Kazinduka, a lot of important holidays abound, such as Christmas, which call for more money to send home.
Worthwhile to note is that many Ugandans invest in different projects back in the country, such as in real estate, which of course, requires them to send money.
When many Ugandans abroad survived the financial crisis, there was an increased urgency to start or complete their projects back at home in case things got worse, says a Ugandan living abroad, who talked on condition of anonymity.
Alex Twinomugisha, an ICT and education expert based in Nairobi, explained the phenomenon using some “theories†he says are based on his experiences:
“The underlying reason for this rebound was that the worst of the global financial crisis was late 2008 and early 2009 and by the second half of 2009, things were more settled,†he says.
“In addition, those who had lost jobs at the height of the crisis in 2008 and early 2009 stopped sending money home as they lost incomes or needed the little money they were earning to keep afloat as they tried to secure other jobs,†he says.
As the economy in many of these countries stabilised in mid 2009, says Twinomugisha, there was a possible recovery of some jobs, especially the white collar ones in the finance and IT fields and hence more money sent home.
“I think many of us abroad increased rates of savings when things looked tricky in late 2008 and early 2009,†Twinomugisha says.
As such, when things looked more stable in mid 2009, many of those people were able to increase the amounts of money sent home and in some cases use savings built, to accelerate projects home.
Many Ugandans working for NGOs abroad, saw drastic cuts in their organisations’ budget and even redundancies in 2008 and early 2009 because donor funds dried up as the financial crisis hit hard.
“This probably had the effect of increased savings as people lost their jobs and reduced remittances. But the situation improved in the later part of 2009, thus leading to improved remittances,†Twinomugisha says.
skara@newvision.co.ug
By Shamilla Kara
IN his state-of-the-nation address in June, President Museveni announced that remittances from Ugandans living abroad rebounded in the period July to December 2009 at about $76m per month, from $39m in January to June 2009.
This was amid the global crisis that severely hit countries in which the remittances came from.
What sparked the hike?
“The reasons as to why Ugandans still send money even when there is economic stress in the host countries are the same reasons they send money when the economy is healthy,†says Joe Kazinduka, a New York-based finance manager.
“The needs of our people do not diminish because of the bad economy, maybe to the contrary,†Kazinduka says.
The rise in remmitances happened in the latter half of 2009, where, according to Kazinduka, a lot of important holidays abound, such as Christmas, which call for more money to send home.
Worthwhile to note is that many Ugandans invest in different projects back in the country, such as in real estate, which of course, requires them to send money.
When many Ugandans abroad survived the financial crisis, there was an increased urgency to start or complete their projects back at home in case things got worse, says a Ugandan living abroad, who talked on condition of anonymity.
Alex Twinomugisha, an ICT and education expert based in Nairobi, explained the phenomenon using some “theories†he says are based on his experiences:
“The underlying reason for this rebound was that the worst of the global financial crisis was late 2008 and early 2009 and by the second half of 2009, things were more settled,†he says.
“In addition, those who had lost jobs at the height of the crisis in 2008 and early 2009 stopped sending money home as they lost incomes or needed the little money they were earning to keep afloat as they tried to secure other jobs,†he says.
As the economy in many of these countries stabilised in mid 2009, says Twinomugisha, there was a possible recovery of some jobs, especially the white collar ones in the finance and IT fields and hence more money sent home.
“I think many of us abroad increased rates of savings when things looked tricky in late 2008 and early 2009,†Twinomugisha says.
As such, when things looked more stable in mid 2009, many of those people were able to increase the amounts of money sent home and in some cases use savings built, to accelerate projects home.
Many Ugandans working for NGOs abroad, saw drastic cuts in their organisations’ budget and even redundancies in 2008 and early 2009 because donor funds dried up as the financial crisis hit hard.
“This probably had the effect of increased savings as people lost their jobs and reduced remittances. But the situation improved in the later part of 2009, thus leading to improved remittances,†Twinomugisha says.
skara@newvision.co.ug