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Diaspora Bonds | Government Banks on Diaspora Bond To Grow Investments

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Posted May 26, 2013 by Ugandan Diaspora News Team in Business ~ 2,504 views

     

Government has devised a strategy to tap into the billions of shillings sent home from the Ugandans living and working abroad. By formulating a diaspora bond, the government, through the foreign affairs ministry and Bank of Uganda (BoU), is planning to tap in the diaspora remittance kitty to support development projects.

Through this bond, Ugandans living and working abroad will be given the opportunity to be part of the development of their country through their annual remittances.This system, which is already succeeding in Ethiopia, once in place, will help Uganda cut on donor funds.

“A diaspora bond will be helpful to Uganda by increasing involvement of Ugandans in diaspora in Uganda’s economic development,” Dr Adam Mugume, the director research BoU explains.

He further said: “Instead of borrowing from external financial institutions, which have more stringent requirements some of which are very costly, the bond in that case would be a substitute”. Close to 2.5 million Ugandans live and work abroad. Their annual remittances to their respective families have partly cushioned their relatives and friends from the increasing cost of living.

Remittances

According to records in the past three years, there has been over $700 million remittances (Shs1.75t) channeled to Uganda. Bank of Uganda’s projections for 2014 show that this figure will hit $1 billion. Because of this, the government thinks once the diaspora bond is formulated, it will help in making funds available for developmental projects to start in time.

“Uganda’s economic and social transformation process is shifting towards a knowledge based society. We are looking to our Ugandan diaspora to actively engage in technology skills and best practices transfer from their host countries,” Mr Frank Sebbowa, executive director -Uganda Investment Authority said.

However, Dr Mugume warned that issuing a bond means the government would be borrowing from Ugandans in diaspora.

dnakaweesi@ug.nationmedia.com

Source — The Monitor Online


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Ugandan Diaspora News Team

Ugandan Diaspora News Online is an independent, non political news portal primarily aimed at serving Ugandans who work and reside outside Uganda. Our aim is to be a one stop shop for everything Ugandan and the celebration of our Ugandan heritage.

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