KAMPALA: Cross-border migration has proven to be a powerful force for poverty reduction in low- and middle-income countries. When migrants’ skills and attributes align well with the needs of their destination society, they reap significant benefits. However, migration also comes with economic and human costs. Formal access to the labor market, such as documented legal status and the right to work and change employers, is crucial for these benefits to fully materialize, according to the World Development Report titled “Migrants, Refugees, and Societies.”
Uganda has experienced significant fluctuations in its net migration rate over the past few years. The net migration rate for Uganda in 2023 was -2.367 per 1,000 population, a 117.16% increase from 2022. In 2022, the rate was -1.090 per 1,000 population, a 682.89% decline from 2021. In 2021, the rate was slightly positive at 0.187 per 1,000 population, marking an 87.23% decline from 2020. This means more people have been leaving Uganda than entering in recent years, with the trend intensifying in 2023.
The top destination countries for Ugandans include Kenya, South Sudan, Rwanda, the United Kingdom, the United States, and Canada. The main reasons for migration from Uganda are wars, social instabilities, economic hardships, unemployment, and educational opportunities.
Economic Gains from Migration
Migration can lead to substantial wage increases for individuals whose skills match the needs of their destination country. These gains often surpass what could be achieved in their home countries, even from internal migration to more prosperous areas. For many migrants and their families, the income gains translate to better living conditions, increased savings, and investments in businesses, housing, education, or healthcare. Wage gaps between destination and origin countries drive economic migration. For instance, a truck driver in Canada earns over five times more than a truck driver in Mexico, while nurses in Germany earn nearly seven times more than nurses in the Philippines. These potential gains are highest for those moving from low- to high-income countries.
In 2019, according to the World Bank, remittances totaled $859 million, an increase of 16 percent from the previous year and in 2023, they have climbed to USD 1.43 billion.
Financial Costs of Migration
However, the financial costs of migration can offset some of these income gains, particularly for low-skilled workers. Migrants incur various expenses before departure, such as job information and matching fees, regulatory compliance fees, transportation costs, and pre-departure training costs. These costs tend to be borne by the workers, limiting their ability to benefit fully from migration opportunities. For example, in Bangladesh, halving the migration cost increases the migration rate by 29%. In Pakistan, a 1% increase in recruitment costs results in a 0.15% reduction in remittances.
Human Capital and Skill Utilization
Many migrants do not realize immediate income gains even when their skills match the needs of the destination society. This is often due to a lack of necessary professional certifications, language skills, or social capital. As a result, many migrants initially earn less than nationals with comparable education and professional characteristics. Some face occupational downgrading, unable to work in positions commensurate with their credentials from their home countries. Over time, migrants’ gains increase as they acquire new skills and develop social networks, leading to better income and professional advancement.
Challenges and Opportunities for Uganda
Uganda’s fluctuating net migration rate highlights both challenges and opportunities. The increased migration out of Uganda points to underlying issues such as economic hardships and social instabilities. On the other hand, remittances from Ugandans abroad can significantly contribute to poverty reduction and economic development in their home country.
Conclusion
Cross-border migration remains a double-edged sword for Uganda and other low- and middle-income countries. While it offers substantial economic gains for individuals and their families, the financial and human costs can be significant. Effective policies and support systems are essential to maximize the benefits of migration while minimizing its drawbacks. As Uganda navigates its migration challenges, addressing systemic issues such as corruption and social instability will be crucial in creating a more favorable environment for both residents and investors.
