COVID-19 and how it has affected the labour externalization

OPINION

By Ronnie Mukundane
Labour externalisation was, until the spread of COVID-19 across the globe, one of the fastest growing sectors and was providing employment opportunities to thousands of Ugandans across the Middle East and other parts of the world.

To date, there are more than 165,000 Ugandans who are gainfully employed in the Middle East through this programme.

According to the recent statistics, the annual remittances from migrant workers in the Middle East alone into the country currently had grown to over $700m and domestically, the sector has also been contributing direct employment opportunities to over 4,000 Ugandans through the 200 licensed labour externalising companies, several predeparture training institutions and other numerous opportunities through back and forward linkages with sectors like hotels and Airlines transport.

However, the emergence of a resurgent COVID-19 virus across the globe has grossly affected the sector. Most of the destination countries like UAE, the Kingdoms of Saudi Arabia and Jordan were the worst hit and had to impose lockdowns. Currently most externalising companies have closed shop, suspended operations affecting over 4,000 direct employees of these recruitment companies and their dependents.

Further, the closure of these companies has affected thousands of migrant workers that had been cleared to travel abroad before the lockdown. For example, about 960 workers, who were in transit (Cairo and Dubai, en route Middle East, etc.) were returned to Uganda due to stoppage of entry to the Middle East.

Moreso, other Ugandans who wanted to seek employment opportunities abroad are now despondent. Each month approximately 5,000 Ugandans are externalised for work. This means in the past five months, 25,000 Ugandans have lost the opportunity to work.

In revenue terms, the sector has been contributing huge none tax revenue to the government agencies through purchase of passports, VISA fees (income to other countries, Interpol charges (98% of the Interpol Letters are from Labour recruiting companies, Bank charges and vaccination payments against yellow fever of 100,000 per person.

This translates into billions of shillings for over 5,000 migrant workers that are externalised every month.
The externalisation sector also has forward and backward linkages to other sectors and has contributed to business growth to these sub-sectors.

For example, the air transport has been hit severely, the Ministry of Gender, Labour and Social Development accredited training centers for Orientation of migrant workers, medical centres accredited to provide medical service, the media for advertisement of job orders averaging sh1.6b per month. Total losses here are estimated at over sh120b in the last five months.

The other challenge for the sector is that some of the migrant workers already abroad have not been paid by their employers due to lack of an income/lockdown, this has led to depletion of the already earned or saved income.

This, however, excludes domestic workers who have continued to work and hence are paid. Many workers whose contracts had expired are stuck in the destination countries and are most likely to illegally stay there due to high rates of unemployment in either countries - Uganda or abroad.

There is already a growing concern that there is going to be increased cost of services involved in the recruitment process due to prolonged and expensive documentation requiring COVID-19 certificates, etc and this lengthy process will lead to human trafficking.

There is also a challenge of bank loans. Most recruitment companies have accumulated unpaid interest on loans acquired before the lockdown currently estimated at sh10b exclusive of interest.

This means with the high interests on loans and loss of business, if some companies are not subsidised by the Government, they will close hence loss of revenue to the Government and jobs for many Ugandans.

However, the sector, through the co-ordination of UAERA is planning a number of recovery interventions in the aftermath of the COVID-19.

These include developing its own Standard Operating Procedures (SOPs) in addition to those developed by  Ministry of Health, ensuring  that all future migrant workers have a COVID clearance certificate to ease their travel and to prepare them for quarantining procedures once they travel and to fast track use of e-business (online applications for Interpol, passports and other services).

We also plan to re-negotiate collaterals with the banks that lent to the companies. We also hope the Government will negotiate with the service providers like Interpol not to charge again for the expired Interpol certificates and Embassies can also waive visa fees for the visas that had been paid for.

In the medium term, we hope the Ministry of Foreign Affairs will prioritise the signing of Bi-laterals and other labour agreements with labour importing countries such as UAE, Qatar, Oman, Bahrain and Turkey. This will help in reducing the operational costs.

There is also need for decentralisation of services such as Interpol and passports to reduce on costs in transport and accommodation.

We hope that in the next two years, the labour externalisation sector, if supported to recover, will play a pivotal role in providing employment opportunities for people who were laid off during COVID-19.

Ronnie Mukundane is the Public Relations Officer/Spokesperson -Uganda Association of External Recruitment Agencies
ronnie.mukundane1@gmail.com