The remittances are likely to increase by 4.1% in 2018.
PIC: Sharon Kinyanjui the Head of East and Central Africa at World Remit (speaking), On her left is Arthur Isiko the Bank of Africa managing director. (Credit: Wilson Manishimwe)
KAMPALA - Uganda received $1.2b (about sh4.5trillion) in 2017, in remittances, accounting for 5% of the country's Gross Domestic Product (GDP), finance experts have said.
The financial experts also added that the remittances are likely to increase by 4.1% in 2018 , improving on the country's economy.
According to Arthur Isiko, the Bank of Africa managing director, the Ugandan Diaspora sends money using World Remit among other channels and collections are made by their relatives back home, which is done in different banks.
A remittance is a transfer of money by a foreign worker to an individual in their home country.
Worldwide, Isiko said the remittances for low and middle income countries have increased to $485billion from $466billion, implying a 9% increase in the past few years.
He said money sent home by migrants is one of the largest financial inflows to developing countries.
During the launch of remittance partnership between Bank of Africa and World Remit on Monday at the Bank's offices in Kampala, Isiko urged the banks to simplify and reduce the cost of sending money by Ugandans in the diaspora.
"People can now send money instantly for collection as cash at Bank of Africa branches using the WorldRemit app or website.
"Majority send money to family and friends. Therefore this partnership is an incredibly important lifeline game charger to our customers,' he added.
Uganda is one of the top five remittance receiving countries in Africa for World Remit.
"Our partnership with World Remit is a crucial piece in the puzzle of Uganda's economic development," Isiko said.
These remittances help Uganda to narrow the gap of economic standing and disparities between its economy and that of other countries since they are known to exceed official aid transfers in some regions and act as a buffer from economic shocks," he explained.
Sharon Kinyanjui, the head of East and Central Africa at World Remit said: "We are delighted to be partnering with Bank of Africa, a pan-African financial institution, to give the 400,000-strong Ugandan diaspora a wider choice of cash pickup locations across the country."
Africa now accounts for over half of World Remit's transactions globally and our on-going collaboration with Bank of Africa will support our plan to serve 10 million customers connected to emerging markets by 2020, according to Kinyanju.
Ronal Kamulegeya the general manager business development, Bank of Africa added "The bank's move to partner with World Remit plays directly into our digital strategy to be the preferred payments solutions provider in our chosen market segments through unrivalled customer experience by use of digital solutions," he said.
"From today World Remit customers can now walk into any of our branches across the country with their valid identification and transaction details which include a transaction reference number, sender names and the amount.
"With these details they will be able to receive money instantly from their loved ones," Kamulegeya added.