Download Measuring Workers` Remittances

Measuring Workers’
Remittances
Michael Atingi-Ego
Bank of Uganda
Outline
• Introduction
• Measurements of Data on Migrants
Remittances
• Weaknesses in the Current Methodology
• Way Forward
Introduction
• Migrant remittances equivalent to 5% of
GDP
• Account of 50% of exports of goods
• Largely spent on consumption, though
investment is now picking up
• Propensity to remit increasing on account
of improving macro-economic
environment, investment climate and
political situation
Introduction
• Seasonal
• From SA, UK and USA
• Outward remittances destined to China
and India mainly
• Accounts for about 3% of GDP
• Commercial banks, Forex Bureaus,
International Transfer Agencies, Informal
Channels
• TT, Money Orders, Drafts, Cash, in Kind
Measurement
• Control total for both inflows and outflows
• Subtraction of all identified inflows and
outflows;
• Residual is deemed private transfer
inflows;
• Private inflows sub-divided into migrant
remittances and other private transfer
inflows including NGO’s, insurance
premiums etc
Measurement
• Breakdown between migrant remittances
and other private transfers is derived using
ratios obtained from commercial banks
monthly reports
• Sometimes underestimated as transfer in
kind is not included or overestimated when
currency conversions take place in
commercial banks (capital a/c
liberalization)
Measurement
• Assumption is that all FX inflows are
converted into local currency
• Outside FX authorized dealers e.g.
informal channels and goods in kind
excluded
Weaknesses in Current
Methodology
• Omission of transfer in kind and transfers
in informal sector
• Import financing does not provide for gifts
or goods in kind
• Agents involved in both domestic economy
and non-resident agents in a sophisticated
method of settlement. Imports vs.
settlement in local currency
Weaknesses in Current
Methodology
• Does not provide any additional data for
analytical purposes e.g. origin of transfers
• Lack of migration statistics to identify
whether Ugandans leaving the country are
on a short or long term duration
• ITRS systems could not be enforced
because of lack of legal mandate
Way Forward
• Use of National Household survey for the first
time ever (2005)
• Law in place to strengthen the use of ITRS
• Licensing of private money transfer companies
apart from the already existing authorized
dealers - expected to lower costs and therefore
improve on the data captured)
• Enforcement mechanism for accurate data
collection provided for in the law.
•Thank You