Remarks of Michael Atingi-Ego, Governor of the Bank of Uganda – as prepared for delivery
Address to the Eighth Annual Bankers’ Conference
Serena Hotel, Kampala
29 July 2025
Esteemed partners, distinguished sponsors, ladies and gentlemen,
I am honoured to stand before you today at this 8th Annual Bankers’ Conference, a flagship event of the Uganda Bankers Association. I extend my sincerest gratitude to the Uganda Bankers Association, IFAD, Mastercard, and all our invaluable partners and co-sponsors for making this pivotal gathering possible. I also wish to acknowledge the presence of thought leaders, regulators, financial institutions, private sector actors, civil society representatives, and academia—your diverse perspectives are vital as we collectively explore the immense potential before us.
The timing of this conference could not be more opportune. The global economy is changing dramatically, marked by evolving migration patterns, shifting financing flows, and a growing demand for more inclusive and sustainable development models. In this dynamic environment, the theme that unites us today — “Harnessing the Potential and Maximising the Impact of Remittances on Development” — is not merely a topic for discussion; it is a profound opportunity, a national imperative, and a testament to the enduring spirit of our people.
A deeper dive into Uganda’s remittance story: the unseen pillars of our economy
Remittances are, without exaggeration, the unseen pillars upholding countless households and a vital force propelling our national development. In 2023 alone, remittance inflows into Uganda were reported at a staggering $1.4bn, accounting for nearly 3 per cent of our GDP. This is not just a statistic; it represents the resilience, sacrifice, and unwavering commitment of our diaspora, who, from distant lands, continue to build bridges of hope and prosperity back home.
Consider this: these flows have consistently demonstrated remarkable resilience and growth, even amidst global pandemics and economic downturns. From $902mn in 2015, remittances surged to $1 .4bn in 2019. While the Covid-19 pandemic caused a temporary dip to $1.1bn in 2020, they rebounded strongly since 2021, averaging $1.4bn annually. This sustained inflow stands as a testament to their stability, often surpassing other foreign exchange earners like coffee export revenue and tourism earnings, providing a steady stream of foreign currency even when other sectors faced headwinds.
Indeed, the macroeconomic stability impact of remittances cannot be overstated. Between 2014 and 2016, when foreign direct investment declined from about $1bn to $626mn due to falling global oil prices, remittances rose from $886mn to $1.1bn, playing a critical role in exchange rate stability despite the stronger US dollar. This countercyclical nature makes remittances a powerful stabiliser for our economy during external shocks.
This sustained inflow has elevated remittances to become Uganda’s most critical source of external financing. Between 2001 and 2023, remittance inflows have consistently exceeded coffee export revenue and tourism earnings, providing a steady stream of foreign currency that has become more reliable than traditional export sectors. Most remarkably, these flows have surpassed foreign aid and support from international institutions such as the IMF, World Bank, and bilateral partners, making them Uganda’s most dependable source of external financing.
But what does this mean on the ground? Remittances provide a critical source of income to many Ugandan families. According to the Annual Personal Transfers Survey, a substantial 68.1 per cent of remittances are used for consumption-related expenses, including essential household goods, while significant portions fund school fees, which represent crucial investments in human capital development.
Beyond these immediate needs, 31.3 per cent supported non-consumption uses, primarily building projects and land acquisitions. When we properly account for education spending as investment rather than consumption, we see that remittances already contribute substantially to both immediate welfare and long-term productive capacity. This demonstrates their immense potential to contribute even more directly to productive investment if effectively leveraged.
Globally, remittances often surpass foreign direct investment and official development assistance in developing countries, underscoring their profound importance in poverty alleviation, enhancing social welfare, and ensuring economic stability in migrant home countries. They directly contribute to 12 out of 17 Sustainable Development Goals, ranging from eradicating poverty and hunger to advancing gender equality, climate resilience, and economic inclusion.
Navigating challenges, seizing transformative opportunities
While the potential of remittances is undeniable, we must also acknowledge the challenges that hinder their full impact. High transaction costs, for instance, remain a significant impediment. In 2021, the average cost of sending $200 to Uganda was a staggering 11.3 per cent — far above the UN SDG target of 3 per cent. This disproportionately affects low-income families, eroding the value received and often discouraging larger transfers.
Furthermore, limited access to digital remittance services, particularly in our rural areas, and persistent regulatory bottlenecks often push our citizens towards informal channels, which, while sometimes convenient, lack the security and transparency of formal systems. These bottlenecks include stringent KYC requirements despite the fact that about 30 per cent of Ugandans lack national IDs, while NIRA’s API currently only provides basic “Yes/No’ verification rather than comprehensive identity data. Additionally, agent network regulations require expensive equipment such as printing devices, and mobile money taxes further discourage formal channel usage.
These structural barriers, combined with limited point-of-sale device availability in rural areas and challenges with electricity and internet connectivity, create significant access gaps.
Fraud, currency volatility, and geopolitical factors also threaten the reliability of these vital flows, while low financial literacy limits recipients’ ability to maximise the productive use of remittances they receive.
However, we must also acknowledge that the global geopolitical environment presents significant headwinds to remittance flows. Increasingly restrictive immigration policies in traditional source countries, particularly the United States, alongside proposed taxes on remittances — such as the US federal government’s 1 per cent tax on cash transfers —threaten to diminish formal remittance flows and drive transfers toward riskier informal channels. These policies, combined with anti-immigration enforcement measures, create environments of mistrust that can reduce remittance volumes by an estimated 1.6 per cent in formal channels.
Yet, amidst these challenges, new remittance corridors are emerging as sources of resilience. The Middle East, particularly the Gulf Cooperation Council countries including Saudi Arabia, UAE, and Qatar, now accounts for approximately 35 per cent of Uganda’s total remittances. These corridors have demonstrated remarkable stability during global crises, with substantial infrastructure investments and long-term development plans ensuring continued demand for migrant workers. This diversification of remittance sources provides Uganda with crucial resilience against policy shocks from traditional corridors, reinforcing the strategic importance of nurturing these emerging partnerships.
Yet, as we celebrate the remarkable contributions of our diaspora, we must also acknowledge a critical imperative: enhancing the quality and protection of our labour exports, particularly to the Middle East. In an increasingly competitive global market, Uganda’s diverse and determined workforce often competes with the standardised, highly skilled labour exports from Asian countries that have set benchmarks not only in workforce calibre but in the comprehensive protections afforded to their citizens abroad.
To fully maximise our remittance potential, we must recognise that quality and protection are inseparable pillars of sustainable labour migration. This means investing strategically in education and vocational training to ensure our workers are not merely participants but formidable competitors in the global market. It means establishing robust regulatory frameworks that shield our workers from exploitation while providing them with the dignity and security they deserve. By learning from Asian countries’ successes and adapting their strategies to our unique context, we can transform our labour exports into beacons of excellence, ensuring every Ugandan worker serves as an ambassador of skill, resilience, and quality.
Still, where there are challenges, there are even greater opportunities. We are on the cusp of a digital revolution, a transformation driven by technological innovations that are reshaping the future of remittances. FinTech solutions, mobile money platforms, and even nascent technologies like stablecoins offer unprecedented avenues to lower transfer fees, increase efficiency, and expand access to financial services for all Ugandans. While we continue to work closely with regulatory partners like the Financial Intelligence Authority to ensure these innovations comply with our robust AML/CFT frameworks, prudent stablecoins may hold particular promise for cross-border remittances by potentially eliminating traditional correspondent banking delays and reducing foreign exchange conversion costs. Imagine a future where remittances settle in minutes, not days, and costs fall below 1 per cent.
This is not a distant dream; it is within our grasp. We have seen the transformative power of mobile money in Kenya with M-Pesa, doubling financial inclusion in five years. Uganda, with its resilient mobile money ecosystem, is primed to amplify this impact.
The indispensable role of financial institutions
This brings me to the pivotal role of our financial institutions. You, our bankers, are the conduits of this transformation. You provide the essential transfer infrastructure — the branches, ATMs, mobile platforms, and partnerships — that ensure secure and timely fund delivery.
You have the power to reduce costs and increase efficiency through strategic partnerships with international money transfer operators. Most importantly, you are instrumental in promoting financial inclusion, offering basic banking services that bring unbanked populations into the formal financial system.
The transformation we seek will not happen by chance— it requires bold action and innovative thinking from every institution in this room. I pose a clear call to action: Innovate! There is immense potential in developing remittance-linked savings accounts, micro-insurance products, and credit facilities that leverage consistent remittance flows as collateral.
Working with the relevant stakeholders, we must actively explore the issuance of diaspora bonds and the securitisation of future remittance flows. These instruments can channel diaspora wealth into large-scale national development projects, from affordable housing to critical infrastructure like energy and transport, benefiting the entire nation. Let us learn from global successes like Nigeria’s robust reforms through better formal channels, including digital financial services, which led to significant increases in remittance inflows, and Kenya’s M-Pesa, which dramatically expanded financial inclusion.
To ensure that remittance funds are used productively, financial institutions can structure specialised products, such as remittance-backed mortgages, or products that direct remittance funds into investments. Furthermore, collective investment schemes can be established, such as diaspora cooperatives, to invest in infrastructure, real estate, or agriculture.
We can use remittances to onboard recipients into broader financial services such as micro-insurance, savings accounts, and credit scoring. This is achievable if institutions develop smart and compliant KYC-lite accounts for the unbanked using national ID or biometric verification. Moreover, financial institutions can ensure gender inclusion is increased by providing tailored services for women-led households, who are often the majority recipients of remittances.
The Bank of Uganda’s unwavering commitment: our path forward
As your central bank, we pledge the unwavering commitment of the Bank of Uganda to create an enabling regulatory environment that fosters innovation, ensures consumer protection, and facilitates the seamless flow of remittances.
We have already made significant strides, including the enactment of the National Payments System Act (2020), which has enabled interoperability across banks, mobile money, and fintech platforms. As a result, formal remittance usage has increased, with 76.9 per cent of recipients in 2023 using regulated channels, where 45 per cent used mobile money, 18.2 per cent used banks, and 12.3 per cent used money transfer operators. Digital apps like WorldRemit, Sendwave, and Chipper Cash have made international transfers faster, safer, and more affordable.
We are actively enhancing the payment infrastructure, with a focus on upgrading the Real Time Gross Settlement System (RTGS) and the East African Payment System (EAPS). A key part of this initiative is the transition to the ISO 20022 messaging standard, which enables richer data exchange to improve transparency in cross-border transactions and reinforce global AML/CFT compliance.
In parallel, we are advancing the development of a National Payment Switch to facilitate seamless, real-time transactions among banks, mobile money operators, and other financial service providers. While there have been delays in implementing the switch, these are being addressed through active government engagement to resolve critical bottlenecks. Collectively, these efforts are expected to significantly enhance the efficiency of both domestic and international remittances.
Currently, many remittance transactions pass through multiple intermediaries such as correspondent banks and global money transfer operators, which increases costs for end users. The National Payment Switch will eliminate these bottlenecks by enabling more direct, efficient fund transfers.
Furthermore, by connecting to regional payment platforms, the switch can support cross-border transfers in EAC Partner States’ currencies, reducing foreign exchange conversion fees and improving settlement timelines. The shared infrastructure promotes competition and costefficiency, while centralised oversight by the BOU ensures pricing transparency and consumer protection.
We are also intensifying our efforts to lower transaction fees. The BOU has continued to promote dialogue between commercial banks and payment service providers about high transaction costs, with the support of the Uganda Bankers’ Association and the Payment Service Providers Association.
These engagements are expected to be reinforced by the proposed Fair Competition Regulations under the National Competition Act, which seek to strengthen our efforts to establish a fairer playing field within the payments ecosystem. This is designed to promote innovation, democratize access to payment services, and ultimately drive down transaction costs for end users.
We have also initiated a review of the National Payment Systems regulatory framework, with proposed amendments that include, among others, the repurposing of interest earned on trust accounts as a mechanism to reduce or subsidise transaction fees.
Furthermore, we are strengthening our data systems. In partnership with IFAD, we are enhancing our data systems to collect high-frequency, more detailed, and disaggregated remittances information by gender, region, channel, purpose, and cost. This entails expanding the remittances reporting framework to include credit institutions, microfinance deposit-taking institutions, payment service providers, and fintechs.
The revised remittance reporting form has already been disseminated to all remittance service providers for implementation. This granular data will inform more evidencebased policymaking and oversight, enabling targeted reforms to reduce costs and improve access.
We are also implementing data warehouse architecture, which involves replication of mobile money data at the BOU, as well as the SupTech project, to support these efforts.
Finally, we will continue to mitigate cybersecurity and digital fraud risks. The BOU has implemented several comprehensive measures to address emerging operational risks and cybersecurity threats among payment service providers, including the issuance of cybersecurity guidelines, enforcement of annual systems audits and periodic system vulnerability assessments, introduction of pre-licensing system vulnerability assessments, issuance of guidance on KYC for PSPs and their agents, and financial reporting and external auditor appointment guidelines. Our public awareness campaigns focus on digital literacy and fraud awareness as part of our National Financial Inclusion Strategy initiatives.
To ensure the system remains secure, industry stakeholders in Uganda’s remittance ecosystem should actively participate in the Financial Sector Anti-Fraud Consortium through information sharing, promoting digital literacy, and raising consumer awareness campaigns. It is also critical to maintain robust cybersecurity frameworks, conduct regular system audits, and continually upgrade infrastructure.
We will continue to collaborate with all stakeholders — government, development partners, regulators, legislators, FinTechs, academicians, researchers, civil society, and labour export agencies — to forge effective and efficient strategies to harness the immense potential in remittances for the socio-economic development of Uganda.
A shared vision for prosperity: our collective future
Let me conclude with a clear call to action for transforming Uganda’s remittance landscape. To fully realise the potential of remittances as drivers of long-term growth, we must advance digital transformation, reduce transaction costs, and promote inclusive policies through strong institutional collaboration.
Our immediate priorities include:
- Enhanced transparency: Beyond our revised reporting framework, we need rigorous diagnostic assessments of pricing structures across all digital financial services to advance fair pricing
- Strengthened infrastructure: Full interoperability between banks and payment service providers will enable smooth integration with diaspora remittance apps, accelerating formalisation and making formal channels more appealing, accessible, and cost-effective
- Strategic alliances: Partnerships between traditional financial institutions, payment service providers, FinTechs, and diaspora networks can create cutting-edge platforms for tracking and pooling diaspora funds, turning remittances into investment opportunities
- Productive channelling: Structure specialised products like diaspora bonds, remittance-backed mortgages, and collective investment schemes such as diaspora cooperatives for infrastructure, real estate, and agricultural investments.
Upon resolving these critical areas, stakeholders should collectively work towards the urgent challenge of lowering transaction costs through bilateral and regional agreements that reduce cross-border fees and encourage remittance growth.
Harnessing the potential and maximising the impact of remittances on development requires a coordinated, multi stakeholder approach, with everyone doing their bit within their means and mandate.
The BOU is actively pursuing initiatives within our realm: enhancing payment infrastructure, strengthening data systems, reducing transaction costs, and creating an enabling regulatory environment that balances innovation with financial stability.
However, realising the vision embedded in our theme demands collective effort. I invite you to share insights on your strategies within your respective mandates and, importantly, advise on what additional initiatives the BOU can undertake relative to other stakeholders as we pursue our mutual goal of transforming Uganda’s remittance landscape.
Let us collectively embrace this opportunity. Let us work hand in hand to transform remittances from a survival mechanism into a powerful pathway for inclusive and sustainable development, one family at a time.
Our bold vision for Uganda’s future, as articulated in Vision 2040, the Ten-Fold Growth Strategy, and the Parish Development Model, hinges on strategic investments in human capital. By maximising the developmental impact of remittances, we can empower our people with the skills, health, and opportunities needed to drive productivity and innovation.
Let us ensure that every shilling sent home builds lasting prosperity—for our families, for our communities, and for our beloved nation.
Remittances are not charity — they are capital. They are not dependency, they are investment. They are not just money transfers — they are hope made tangible, dreams given wings, and families lifted from poverty to prosperity.
Together, we have the power to ensure that every dollar sent home does not merely feed a family today, but builds the Uganda of tomorrow. Let us harness this potential. Let us maximise this impact, and transform not just how money moves, but how a nation rises.
The diaspora has sent us more than money — they have sent us opportunity. Now, it is our collective responsibility to multiply that opportunity into national transformation.
Thank you. God bless!
