The World Bank has released a new report “The Migration and Remittances Factbook 2011” showing that African countries including Uganda will get increased remittances from its Diaspora following the economic recovery in most developed countries.

“We estimate that recovery will continue over the next two years, with remittance flows to the continent possibly reaching about $24 billion by 2012,” said Dilip Ratha, manager of the Migration and Remittances unit at the World Bank.

According to the report, Ugandans working abroad are expected to send home around $773 million (close to 2 billion Uganda shillings) in remittances as the global economy shows signs of recovery from last the depression suffered over the past two years.

If Diaspora Ugandans contribute 2 billion shillings annually, it means they are able to raise 25% of Uganda’s 8 billion shillings national budget, and almost equal the amount of money contributed by donors to Uganda’s budget, which is less than 30%.

Last year, Uganda got $694 million in remittances from the Ugandans abroad, the highest foreign exchange earner for Uganda.

The government of Uganda in 2004 adopted a flexible policy to export labout out of Uganda helping sign up many skilled Ugandans to go and work in Canada, the USA and Britain, despite concerns that Uganda’s skilled labour was being sent out of the country leaving Uganda with little or no skilled labour to meet the country’s needs, especially in the health sector.

But the remittances report goes to show the government of Uganda might have been foresighted in sending some of its skilled labour force to earn much more money abroad and send home remittances that can further develop the country.

According to the World Bank report, the Diaspora remittances are likely to be more than the estimates since many African send home money through informal channels that are not recorded.

“The fact that remittances are so large, come in foreign currency, and go directly to households, means that these transfers have a significant impact on poverty reduction, funding for housing and education, basic essential needs, and even business investments,” Ratha said.

Nigeria, Africa’s most populous country with more than 130 million people, recorded the highest amount of remittances at $10 billion.

The report calls for a reduction in the cost of sending money back to African countries, if the diaspora remittances are to be more helpful.

The report says it costs more than 10% to send money to Africa compared to other regions, with the costs getting even higher within Africa.

The recent launch of mobile money transfer services in 21 African countries through a partnership of Western Union and MTN Group is expected to reduce on the cost of sending money as electronic instant delivery of money to people’s mobiles becomes a reality.

By John Isingoma, Ultimate Media