By Mulengera Reporters
The Bank of Uganda is preparing to roll out a series of new investment products targeting Ugandans living abroad, including a Diaspora Bond, as part of efforts to channel remittances into long-term national development projects.
The announcement was made by the Bank of Uganda’s Deputy Governor, Prof. Augustus Nuwagaba, during the Equity Bank Diaspora Xchange webinar held on Saturday under the theme, “From Remittance to Investment Capital: Diaspora Wealth for Uganda’s Economic Transformation.”
Prof. Nuwagaba said the central bank was developing the Diaspora Bond to provide Ugandans abroad with a secure opportunity to invest directly in government development programmes while earning returns on their savings. He explained that the initiative was intended to enable members of the diaspora to invest safely while supporting Uganda’s economic development.
In addition to the Diaspora Bond, he revealed that the central bank was also preparing a Sukuk Bond, which would be structured in accordance with Islamic finance principles, alongside a Uganda Savings Bond aimed at making government securities accessible to ordinary Ugandans through low minimum investment thresholds.
According to Prof. Nuwagaba, the Uganda Savings Bond would allow even small-scale investors to participate in government securities by requiring relatively modest investment amounts.
The proposed investment products, he noted, form part of broader efforts to transform diaspora remittances from household support into productive capital that can finance infrastructure, housing and other strategic sectors of the economy.
Prof. Nuwagaba said Uganda could draw valuable lessons from countries that have successfully mobilized diaspora savings to accelerate economic transformation.
He cited Singapore and South Korea as examples of countries that achieved rapid economic growth through disciplined savings, strategic investment and long-term planning. He also pointed to Nigeria, which pioneered Africa’s first Diaspora Bond, and Ethiopia, which successfully mobilized citizens to finance large-scale infrastructure projects.
He further observed that the Philippines had become one of the world’s leading recipients of remittances because of deliberate government policies that created confidence among citizens living abroad, making remittances one of the country’s strongest pillars of economic growth.
Seeking to reassure potential investors, Prof. Nuwagaba said Uganda’s financial sector remained stable, resilient and well supervised. He explained that the Bank of Uganda regularly conducts stress tests and macro-prudential assessments to identify and manage potential risks before they threaten the banking sector.
He assured members of the diaspora that the country’s financial system had strong regulatory safeguards to protect investors and maintain confidence in the banking industry.
The Deputy Governor added that the central bank was strengthening Uganda’s National Payments System and planned to introduce a National Switch to facilitate faster, more efficient and seamless movement of funds across financial institutions.
Beyond the planned financial products, Prof. Nuwagaba called for greater recognition of Ugandans living abroad, proposing the establishment of an official Diaspora Day to acknowledge their growing contribution to national development.
He said members of the diaspora were making a significant contribution to Uganda’s economy and deserved formal recognition from government for their role in driving economic growth.
He noted that remittances had become one of Uganda’s leading sources of foreign exchange and now accounted for a substantial contribution to the country’s Gross Domestic Product.
Prof. Nuwagaba also encouraged Ugandans abroad to shift their focus from sending money home solely for household consumption to investing in productive sectors such as housing, infrastructure, financial markets and entrepreneurship.
According to him, increased diaspora investment would play a crucial role in supporting Uganda’s ambition of expanding its economy to US$500 billion through industrialization, increased domestic savings and private sector-led growth.
In his concluding remarks, Prof. Nuwagaba urged Africans to take ownership of their own development narrative, referring to the African proverb that says until the lion learns to tell its story, the story of the hunt will always glorify the hunter. He argued that Uganda had made significant economic progress and should confidently communicate its achievements while creating more opportunities for citizens at home and abroad to participate in the country’s transformation. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
