Labour recruitment firms suspend operations as Uganda loses billions in remittances

Labour export companies say they have suspended operations, citing Covid-19, which has induced severe financial hemorrhage.

The companies, according to a Friday statement, say they can no longer afford pay rent, workers and sustain other related operations.

Baker Akantambira, the chairperson of the Uganda Association of External Recruitment Agencies (UAERA), says the October 15 statement from the Ministry of Gender, Labour and Social Development did not cast a certain future.

The ministry in the statement said it had kicked off consultations with the ministry of health to roll out SOPs to guide business resumption. However, the ministry argued for a phased re-opening starting with clearance of migrant workers before allowing domestic workers and this did not satisfy UAERA.

“The Ministry can confirm from the statistics in its records that almost 90% of labour recruitment companies are engaged in externalization of domestic workers,” Akantambira said in the Friday statement.

“Whereas the licenses are issued for general categories, the dynamics in the market have dictated the categories the labour companies can reasonably engage in; in this case domestic workers. Therefore, the proposed phased reopening of the sector in the manner proposed is as good as extending the suspension.”

According to UAERA, over 4,000 Ugandans that are directly employed by the labour recruitment companies have been rendered jobless and 35,000 employment opportunities for Ugandans have been lost in the last 7 months.

Government is also losing Shs2.2 billion in monthly non-tax remittances that were being earned before the suspension of externalization activities due to Covid-19.

More than 165,000 Ugandans, according to the statement, are gainfully employed in the Middle East through this program and these annually send to Uganda over $700 million.

“In revenue terms, the sector has been contributing huge non-tax revenue to government agencies through processing of passports, VISA fees (income to other countries, Interpol charges (98% of the Interpol letters are from labour recruiting companies, bank charges and vaccination payments against yellow fever of 100,000 per person and now the recently introduced COVID-19 PCR Certificate fee. This translates into billions of shillings for over 5,000 migrant workers that are externalized every month,” reads the statement.