Opinion: Labour Externalization Remains Lifeline For Youths, Economy Affected By COVID-19

By Spy Uganda

Labour externalization was one of the subsectors of Uganda’s economy that were severely hit by the resurgent Covid-19. First, Uganda’s main destination countries for migrant workers like the Kingdoms of Saudi Arabia and Jordan and UAE were the worst hit and had to impose lockdowns. Then the Government of Uganda had to impose a national Lockdown in March 2020 and the current one of 42 days to tame the raging pandemic. The closure has had both immediate and long term diverse impact on the sector. Hundreds of Labour externalizing companies suspended operations thereby affecting over 4,000 direct employees of these recruitment companies and their dependents. The suspension also affected thousands of migrant workers that had been cleared and were in transit to the Middle East but had to return to Uganda due to stoppage of entry to the Middle East.

The severe impact of the pandemic is visible across the country. Closure of businesses and rampant job losses has left many Ugandans despondent. Sectors like tourism and transport have also been severely affected among others. This sector itself was a major source of revenue to Government agencies before Covid-19 contributing huge None Tax Revenue to government agencies through Purchase of passports, Interpol certificates (98% of the Interpol Letters are for Labour recruiting companies, Bank charges and Vaccination payments against yellow fever of 100,000 per person which translated into billions of shillings for over 5,000 migrant workers that were beingexternalized every month then.

Consequently, the resumption of labour externalization in December 2020 had helped create opportunities for many Ugandans who had become hopeless and were in despair because of rampant job losses due to covid-19. According to records from Ministry of Gender, Labour & Social Development, over 31000 Ugandans have been externalized to work abroad in the last five months (Jan 2021 to May 2021) thereby getting a lifeline to provide for their families and boast their livelihoods. Currently, the sector is overwhelmed with thousands of young people who now favorably view external employment opportunities as one of the guaranteed ways of earning a decent living.

The resumption of labour externalization will also boost Uganda’s economy that is still recovering from the debilitating effects of the pandemic. Prior to covid-19, the annual-remittances from Ugandan migrant workers had grown to overUSD 1.3Billions globally and USD 700millions from those working in the Middle East alone. Domestically, the sector has-also been contributing direct employment opportunities to over 4,000 Ugandans through the over 200 Licensed Labour externalizing companies. The resumption of the sector and increasing number of Ugandans seeking employment abroad means foreign remittances alone will soon hit a USD 2 billion mark, which will be a significant contribution to the country’s Gross Domestic Product.

The other important but often ignored contribution is this-sector’s strategic importance to the other sectors of the economy. Labour externalization plays a critical forward and backward linkage to other sectors like the tourism and the Airlines transport sectors. Further this sector creates opportunities for a big number of medical centers accredited to provide medical services to migrant workers, Uganda’s media for job-advertisements. There is also the now growing pre-departure training institutions that employ countless Ugandans as facilitators among others.

Like most sectors, labour externalization has had its fair share of challenges. Foremost to these challenges has been the negative media around the work and safety of Ugandan migrant workers irrespective of whether they traveled through a licensed company, were trafficked or went on their own, which has contributed to public misconception and blacklash against the sector. Fortunately, the public has gradually come to appreciate and embrace the sector as one of the reputable sectors contributing to Uganda’s economic growth.

Uganda Association of External Recruiting Agencies (UAERA) further looks forward to building closer partnerships with the private sector especially private financial institutions. As the sector continues to grow, key sector players will require dependable financial resources to expand their services. More so, this cooperation will help to renegotiate collaterals between the financial institutions and the labour externalising companies especially for the credit facilities that were extended to other companies after the emergence of covid-19.  

Labour externalization recovery can be a lever of social and-economic transformation if the sector is given the necessary support.

The writer is Ronnie Mukundane, the Public Relations Officer/Spokesperson -Uganda Association of External Recruitment Agencies (UAERA) ronnie.mukundane1@gmail.com.