Uganda’s Remittances Hit Shs 9.6 Trillion in 2025, Driven by Mobile Money

Business

Uganda’s Remittances Hit Shs 9.6 Trillion in 2025, Driven by Mobile Money

Uganda’s remittance market reached a record Shs 9.6 trillion (approximately US$2.5 billion) in inflows for 2025, a sharp increase from earlier estimates of around US$1.5 billion (Shs 5.7 trillion). Analysts note that this surge reflects improved data collection rather than solely organic growth. Nevertheless, it underscores remittances as a vital economic lifeline for millions of Ugandan households, supporting consumption, education, healthcare, and small businesses.

Improved Data Reveals the True Scale

The Bank of Uganda (BoU), in collaboration with the International Fund for Agricultural Development (IFAD), launched an interactive remittance dashboard in early April 2026. This tool expanded coverage to include additional banks, mobile money platforms, and fintech service providers, with monthly transaction-level reporting. Authorities captured an extra US$1 billion in previously underreported flows, now equating to roughly 3.8% of Uganda’s GDP.

In 2025, Uganda recorded over 16 million remittance transactions, with an average value of about US$152 per transaction. While Uganda remains a net recipient, with outflows around US$402 million mainly to India, Kenya, the US, UK, and Canada, inflows are dominated by the United States (US$702 million, 28% of the total), followed by Saudi Arabia, the UK, the UAE, and Canada.

Mobile Money Becomes the Dominant Channel

Mobile money platforms have overtaken traditional channels, handling 61% of total remittance inflows by value. Digital channels overall account for 73–75% of inflows, while cash pickups have declined to around 27%.

This shift is driven by convenience, lower costs, widespread adoption, and speed. Recipients can receive funds directly on their phones without visiting banks or agents. Uganda’s high mobile money penetration, with millions of registered users and agents nationwide, has made services such as MTN MoMo and Airtel Money central to cross-border remittances. Instant transfers also enhance security and reduce risks associated with cash handling.

Economic and Social Impact

Remittances provide a stable, counter-cyclical source of foreign exchange, often more reliable than foreign aid or volatile exports. They boost household welfare, increase financial inclusion, and support rural development. Households using mobile money are more likely to receive remittances and receive higher amounts on average. Funds frequently flow to districts outside major cities, aiding agriculture, education, and health. Lower remittance costs ensure that more money reaches families compared to global averages.

Challenges and Outlook

Despite the progress, challenges remain, including regulatory harmonization for cross-border transfers, cybersecurity risks, and ensuring wider rural access. Outflows indicate some capital movement abroad, though inflows far exceed them. Continued digital innovation, improved interoperability, and policies supporting diaspora engagement could sustain growth. The new BoU-IFAD dashboard will also help policymakers design interventions linking remittances to productive investments in agriculture and SMEs.

The Shs 9.6 trillion milestone, with mobile money firmly leading, highlights Uganda’s rapid digital transformation in finance. What was once a cash-heavy, opaque market is becoming more transparent, efficient, and inclusive—strengthening the economy one mobile transaction at a time.

Also Read