Labour Exports Earn Uganda US$1.6 Billion Annually

Uganda earns about 1.6 billion US dollars annually from Ugandans working abroad, making labour exports an important source of foreign exchange alongside tourism, remittances and merchandise exports.

Bank of Uganda Deputy Governor Professor Augustus Nuwagaba says about 900 million dollars of the earnings come from unskilled Ugandans working mainly in the Middle East, while about 700 million dollars is generated by skilled professionals working in countries such as the United States.

Ugandan workers are mainly employed in countries including Saudi Arabia, the United Arab Emirates, Qatar and the United States.

Speaking on Friday at a town hall meeting at White Horse Inn Hotel in Kabale District, Nuwagaba said labour externalisation is increasingly important to Uganda’s external sector because the income supports household spending, contributes to foreign exchange reserves and strengthens the country’s current account.

Nuwagaba, however, said Uganda could earn significantly more from labour exports if more workers acquired skills that enable them to compete for professional and managerial positions.

He urged government and other stakeholders to strengthen vocational and professional training before Ugandans leave the country for employment.

Nuwagaba said skilled workers are more likely to secure better-paying jobs than casual employment, which would increase the amount of money sent back home.

The figures highlight the growing importance of Ugandans working abroad to the country’s foreign exchange earnings at a time when Uganda continues to face pressure from a relatively narrow export base and a high import bill. 

Nuwagaba said Uganda also earns about four billion US dollars annually from foreign visitors, including tourists and investors, making tourism another major source of foreign exchange. 

He attributed the growth of tourism and investment partly to the peace and security that the government has strengthened across the country.

However, Nuwagaba said foreign exchange earnings from labour and tourism need to be matched by increased production and exports of goods and services if Uganda is to reduce pressure on the shilling. 

He said Uganda exports relatively little compared to what it imports, including fuel, pharmaceuticals, steel and other industrial inputs.

The resulting trade imbalance, he said, contributes to pressure on the shilling and widens the country’s current account deficit. 

The shilling is currently trading at about 3,940 against the US dollar, compared to about 3,740 previously. 

Nuwagaba said increasing domestic production and adding value to agricultural and other products would enable Uganda to expand its export base, generate more foreign exchange and reduce dependence on imports. 

He also encouraged Ugandans with substantial savings to invest in productive economic activities instead of keeping all their money in bank accounts. 

Nuwagaba warned that depositors could lose part of their savings if a bank fails, noting that the Deposit Protection Fund of Uganda currently provides compensation of up to 10 million shillings to eligible depositors.



He said Uganda needs to increase productivity and value addition if it is to build sustainable foreign exchange earnings, support the shilling and maintain economic growth. 

Nuwagaba said the Bank of Uganda will continue supporting the government’s Tenfold Growth Strategy towards 2040, which identifies industrialisation, tourism, information and communication technology and commercial agriculture among the drivers of economic transformation and export growth.