Remittances in Uganda

Uganda is a major net recipient of remittances, with inflows contributing approximately 4% to its GDP in 2016. While mobile money has expanded access, the sector faces significant hurdles, including high costs for transfers from developed countries, an oligopolistic mobile money market, and restrictive KYC requirements that exclude approximately 16% of adults without national IDs. Infrastructure gaps in rural areas—specifically poor roads and low electrification—further hinder the expansion of formal services. The report highlights the disruptive potential of the 2018 mobile money tax and recommends mandating interoperability, adopting a risk-based approach to AML/CFT, and transitioning from interim guidelines to a formal e-money law.

• Uganda is a significant net recipient of remittances, ranking as the sixth-highest recipient in Africa. In 2016, inflows exceeded USD1 billion, adding approximately 4% to the national GDP.
• Formal remittance costs remain high, particularly for transfers from developed nations. A USD200 transfer from the UK averages 7.3%, exceeding the Sustainable Development Goals' target limit of 3% to 5%.
• The mobile money market is characterized by an oligopoly where dominant operators stifle competition through a lack of interoperability and restricted access to infrastructure, such as towers and USSD access.
• Strict Know-Your-Customer (KYC) requirements and the lack of a risk-based approach (RBA) exclude a significant portion of the population. Approximately 16% of adults lack the official ID required for services, affecting over 3.2 million people.
• The introduction of a mobile money tax in July 2018 (initially 1%, later reduced to 0.5% for cash withdrawals) is viewed as a threat that may drive consumers toward informal remittance channels.
• Physical infrastructure deficits in rural areas, including poor road networks and low electricity access (18% in rural areas), increase the operational costs for remittance service providers and limit digital expansion.
• Regulatory uncertainty persists because mobile money is governed by non-binding 2013 guidelines rather than formal law, leading to overlapping jurisdictions between the Bank of Uganda (BoU) and the Uganda Communications Commission (UCC).

APA

Cooper, B., Esser, A., Tuyeni, R., Shazeaa, P., & Mohamod, L. (2018). Remittances in Uganda. FSD Africa. https://fsdafrica.org/wp-content/uploads/2025/05/Volume-3_Barriers-to-remittances-in-Uganda_FSDA_October-2018.pdf

Chicago

Cooper, Barry, Antonia Esser, Rose Tuyeni, Peter Shazeaa, and Lal Mohamod. Remittances in Uganda. FSD Africa, 2018. https://fsdafrica.org/wp-content/uploads/2025/05/Volume-3_Barriers-to-remittances-in-Uganda_FSDA_October-2018.pdf.

Wikipedia

{{cite report |last1=Cooper |first1=Barry |last2=Esser |first2=Antonia |last3=Tuyeni |first3=Rose |last4=Shazeaa |first4=Peter |last5=Mohamod |first5=Lal |title=Remittances in Uganda |publisher=FSD Africa |date=October 2018 |url=https://fsdafrica.org/wp-content/uploads/2025/05/Volume-3_Barriers-to-remittances-in-Uganda_FSDA_October-2018.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{cooper2018remittances, author = {Cooper, Barry and Esser, Antonia and Tuyeni, Rose and Shazeaa, Peter and Mohamod, Lal}, title = {{Remittances in Uganda}}, institution = {FSD Africa}, year = {2018}, month = oct, url = {https://fsdafrica.org/wp-content/uploads/2025/05/Volume-3_Barriers-to-remittances-in-Uganda_FSDA_October-2018.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }