Measuring Workers’ Remittances Michael Atingi-Ego Bank of Uganda

Outline Introduction Measurements of Data on Migrants Remittances Weaknesses in the Current Methodology Way Forward

Introduction Migrant remittances equivalent to 5% of GDP Account of 50% of exports of goods Largely spent on consumption, though investment is now picking up Propensity to remit increasing on account of improving macro-economic environment, investment climate and political situation

Introduction Seasonal From SA, UK and USA Outward remittances destined to China and India mainly Accounts for about 3% of GDP Commercial banks, Forex Bureaus, International Transfer Agencies, Informal Channels TT, Money Orders, Drafts, Cash, in Kind

Measurement Control total for both inflows and outflows Subtraction of all identified inflows and outflows; Residual is deemed private transfer inflows; Private inflows sub-divided into migrant remittances and other private transfer inflows including NGO’s, insurance premiums etc

Measurement Breakdown between migrant remittances and other private transfers is derived using ratios obtained from commercial banks monthly reports Sometimes underestimated as transfer in kind is not included or overestimated when currency conversions take place in commercial banks (capital a/c liberalization)

Measurement Assumption is that all FX inflows are converted into local currency Outside FX authorized dealers e.g. informal channels and goods in kind excluded

Weaknesses in Current Methodology Omission of transfer in kind and transfers in informal sector Import financing does not provide for gifts or goods in kind Agents involved in both domestic economy and non-resident agents in a sophisticated method of settlement. Imports vs. settlement in local currency

Weaknesses in Current Methodology Does not provide any additional data for analytical purposes e.g. origin of transfers Lack of migration statistics to identify whether Ugandans leaving the country are on a short or long term duration ITRS systems could not be enforced because of lack of legal mandate

Way Forward Use of National Household survey for the first time ever (2005) Law in place to strengthen the use of ITRS Licensing of private money transfer companies apart from the already existing authorized dealers - expected to lower costs and therefore improve on the data captured) Enforcement mechanism for accurate data collection provided for in the law.

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