Uganda postpones diaspora bond
The bond was meant to help finance the country's infrastructure.Plans for a diaspora bond have been postponed due to a low level of awareness, the Bank of Uganda (BoU) has announced.
"It may not be feasible to issue a diaspora bond independently, as there were concerns from the study about the lack of a critical mass to fully subscribe to this diaspora bond," said BoU assistant director of financial markets Arnold Bagubwagye, quoted by the East African.
The bond was designed to help finance the country's infrastructure and reduce borrowing from external financial institutions.
Ugandans abroad would have benefited from discounts on government debt and been able to transfer money back home in a safe way, avoiding any fraudulent deals.
However, Mr Bagubwagye said that the government was faced with the challenge of inadequate data on its nationals abroad, along with a lack of knowledge about some financial instruments such as bonds.
The government is intensifying efforts to raise awareness of the bond and a special channel is being developed to this effect.
"Once we attain a critical mass, then a full diaspora bond can be considered," Mr Bagubwagye said.
African countries rely heavily on remittances as sources of funding. The World Bank estimates that remittances from migrants are expected to reach $516 billion (€472 billion) globally in 2016.
Ugandans abroad currently send around $900 million annually back home.