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How Labour Export Industry Is Boosting Growth Of Uganda’s Economy

The Idea of externalizing labor in developing countries was born as a result of high levels of unemployment especially among the employable unemployed youth.

In Uganda, a number of labour recruiting companies that are licensed and monitored by Ministry of Labour, Gender and Social Development  have in recent years been securing jobs abroad for jobless Ugandans and there are vivid gains the country is registering steadily as remittances from abroad have boosted growth of the economy.

Labour recruiting companies are organized under their umbrella body, Uganda Association of External Recruitment Agencies (UAERA) that brings together all 151 recruitment agencies under one roof to ensure protection of Ugandan externalized workers, observation of their human rights and welfare, advocacy and self-regulation among other things.

The association spearheaded the steady growth of the labor externalization industry to what it is today.

Ever since this industry was open for Ugandans, millions of Ugandans have since left for Jobs in the United Arab Emirates, Saudi Arabia and a few gulf state countries to work as both professionals and non-professional in categories which include technicians, security personnel, porters, drivers, cleaners, catering and hospitality personnel among other jobs.

According to information obtained from the UAERA  annual report, approximately 140,000 Ugandans are currently deployed in the Middle East and domestic workers contribute to 30% of this population where as others are in other categories mentioned above and the salary depends on qualification and experience for the professionals who earn between US $1,000-US$6,000 depending on one’s job but also skilled and non- skilled earn between $225-$1,000 that includes free accommodation, transportation to and from work and medical insurance as provided by law.

Delving into how this industry is contributing hugely to nation building, let’s factor in the following;

Gov’t collections from Passport issuance

Currently, the Immigration Office charges Shs300,000 for an express passport and many Ugandans intending to travel prefer express passports nowadays because a passport book is one of the key requirements one has to present before they are registered by the employment agencies.

On average 151 registered recruitment agencies supply 500 people to different countries in a month and if each person paid Shs300,000 for an express passport, that means that government collects Shs150M per month from only this category of people intending to travel for work through these agencies bringing an average total of Shs1.8bn annually that government of Uganda collects from passport sales through the Ministry of Internal Affairs’ Immigration Office.

This excludes Shs80,000 each individual intending to travel abroad is charged before being cleared by Interpol (Police recommendation).

Collections from Yellow Fever Cards

 As per Uganda’s Immigration law, anybody intending to travel via Entebbe airport is required to test for yellow malaria and they are given a card to present at the airport that clears him/her as negative from yellow fever.

These yellow fever cards are normally obtained from a few hospitals that are designated and recognized by government like Norvik hospital, KCCA hospital , Victoria hospital that issue these cards on behalf of government  at  a cost of  Shs100,000.

This means that government collects over Shs600m annually from issuance of yellow fever cards to the candidates going to work abroad through recruitment agencies and this is a good contribution to the economy through our health sector.

Boosting the construction and housing sector

For most of the young Ugandans who travel to work abroad after spending years on the streets and failing to get employed, their most immediate dream is to go work and save money to buy a plot of land or two and build themselves or their parents decent home, but also at least put up rentals that can be used to generate income when they return after ‘Kyeyo’.

According to Uganda National Bureau of Statistics (UBOS), Uganda’s population is projected to grow to 41.2 million by 2020 yet the country currently has a housing deficit of about 1.2 million units, with Kampala alone having a staggering deficit of over 200,000 units.

The real estate sector benefits so many people. The changing skyline of Kampala and face of real estate sector can largely be attributed to Ugandans working abroad.

Land prices in areas surrounding Kampala especially Wakiso, Mpigi and Mukono have also shot up in the last 5 years due to high demand in places like Kakiri, Gayaza,Nansana, Sonde Bukerere and Kawuku where a plot of land measuring 50*100 used to sell at Shs7m is now selling at Shs30m.

In addition to providing employment abroad, labour recruiting agencies also employ thousands of Ugandans.

Each licensed labor office has an average of 10 staff and if there are 151 companies, then the sector directly provides employment to over 1,500 Ugandans.

Additionally,  the sector has training centers, the secretariat, medical centers, airline agencies and many more including payment of taxes to Uganda Revenue Authority (URA) and Local Governments.

To cap it up, statistics from World Bank, IMF and Bank of Uganda show that personal remittances to Uganda have grown by 174.6% from $451.6million (Shs1.66trillion) in 2007 to $1.24billion (Shs1.6trillion) in 2018.

The Bank of Uganda Personal Transfers Survey 2017 indicate that Middle East was the second biggest source of remittances to Uganda (28.6%) after Africa (29%) and Europe (20.7%) respectively.

The survey also indicated that remittances benefited up to 820,000 households and that $6 out of every $10 received went to financing house hold expenses and education.

Government should therefore keenly look at this sectors’ contribution especially in curbing the rampant unemployment and provide the industry with the necessary regulatory framework and other support to develop it into a more gainful sector.

By Amon Baita

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