Las relaciones comerciales

Labour circulation forms an important part of migration within East Africa. Due to this, a range of innovative informal remittance systems have developed over time to facilitate inter- regional inflows through bus companies and couriers services (DFID 2004). This has been explained in earlier chapters, showing that informal channels are preferred to the formal channels of remitting funds because they are suitable for lower income earners like self employed business people and traders (see chapter 5).

What was common from the responses of the migrants and the analysis of secondary data is that (i) there was a net flow of funds in favour of Uganda; and (ii) more than two thirds of the transacted funds originated from, and was destined to, the cities of Kampala and Dar es Salaam respectively. The next most active towns in Uganda were Masaka, Mbale and Mbarara while in Tanzania active towns in remitting funds were Dodoma, Mwanza, Morogoro and Kyela, and those receiving from Uganda were Kahama, Moshi and Zanzibar. An interesting feature of the mapping of source and destination of funds is the asymmetric nature of the relationship. Towns leading in remitting funds from Tanzania to Uganda were not necessarily in the league of leading recipients of reversed funds from Uganda. The same is true for towns in Uganda whereby when Kampala is excluded, the leading remitting towns are not high beneficiaries of funds from Tanzania.

6.3.1 How Can We Explain This Asymmetric Relationship?

The above phenomenon is somehow expected if we assume that migrants will settle in places with higher economic prospects, which enables them to save and send out funds. It can be further assumed that since the low income earning probability pushed them to move out of their home villages they are inclined to send money back. That is why we cannot observe a mirror image or reciprocal sending and receiving from the same locations. This is an area subject to further analysis and what this assessment observed is that money was flowing from relatively well-off geographical locations in Uganda to less economically endowed locations and families in Tanzania.

The above observation should partially explain what is observed in Table 3 where the ranking of funds sent through the formal system to Uganda is similar to that provided by individual migrants in Tanzania on where they usually send their money in Uganda. On the contrary, Tanzanian migrants in Uganda reported a different pattern of where the money is sent in Tanzania, mostly informally, and included traditionally migrant labour supply districts in Iringa and Kilimanjaro regions.

6.3.2 Which Towns Dominated Sending and Receiving Funds?

As for Tanzania, although Dar es Salaam accounted for more than 80% of the funds transmitted to Uganda through official means, its share of incoming funds from Uganda was about 57% based on a three year average. As mentioned earlier, the scenario is not the same for money sent informally, which shows that Moshi, Bukoba and Iringa regions dominated in getting such funds (see Table 13).

Table 13 Comparison of Source of Funds and Destination between Official Data and Migrants’ Information

Outbound Funds to Uganda Inbound Funds from Uganda

Top 10 Districts from Post Office records

If mentioned by UG Migrants in survey

Top 10 Districts from Post Office Records

If mentioned by TZ Migrants in survey

Kampala 66.2% Dar es salaam 5.4%

Masaka 10.4% Kahama Mbale Moshi 17.9% Mbarara 13% Zanzibar Jinja Korogwe Entebbe Ngara Mukono Tabora Kabale Nzega Bushenyi Arusha Buwenge Singida Comments About 10% mentioned are outside the top 10 by post office: Busia=7.8% and Kyotera=2.6%

Top 1, 3 and 4 not part of the Post Office list: Bukoba=23.2% and Iringa=10.7

Source: This study survey, 2009.

As previously suggested that while we might have some explanations to the characteristics of the top ten receiving districts in Uganda, namely as academic centres for post-primary school learning, more explanation is needed to explain the counterpart receiving districts in Tanzania, namely Iringa and Bukoba, as reported by the migrants since official data did not indicate that these were regular recipients of remittances. While the case of Bukoba can easily be explained due to its close location to the border, that of Iringa, which is further away from the border, begs for further explanation since the mapping of the same set of data shows that on average the further one is from the border, the more likely is inclined to use official remittance system.

Table 14 Top five Tanzanian Districts Receivers of Ugandan Funds USH, 2006-2008

Town 2006 2007 2008 Total, TZS

Chart – Proportion of funds received from Uganda by Destination Town Dar es Salaam 2,131,205 7,649,610 1,547,908 11,328,723 Kahama 0 1,785,714 946,000 2,731,714 Moshi 1,062,280 859026 643,092 2,564,398 Zanzibar 94,300 519701 115,000 729,001 Kargwe 0 0 419,100 419,100 Other 12 towns 741,9 53 499,450 741,697 1,983,100

Source: This study survey, 2009

Table 15 Top five Districts Receiving Money (TSH) from Tanzania 2006 to 2008

Ugandan Receiving

District 2006 2007 2008 total Percent of Total

Kampala 65,015,379 200,436,931 177,418,961 442,871,271 72.6% Masaka 8,785,182 9,810,822 5,545,340 24,141,344 4.0% Mbale 4,371,254 3,599,717 5,249,350 13,220,321 2.2% Mbarara 3,472,790 3,369,226 2,706,440 9,548,456 1.6% Jinja 1,704,204 3,586,481 1,142,464 6,433,149 1.1%

Source: This study survey, 2009

Figure 1: Top Ten Ugandan Districts (excluding Kampala) Receiving Money (TSH) from Tanzania (from 2006 to 2008)

Another observable feature of remittances made to Uganda is that other towns have been gradually taking the place of Kampala as the main recipient of funds from Tanzania (see Table 15 and Figure 1). This means two things: more and more Ugandans from outside Kampala are working in Tanzania and Tanzanians going to live in Uganda are spreading beyond Kampala. It might also mean that remitting services in the districts are getting better so that senders feel secure enough to use services in the districts instead of Kampala. It is not uncommon for people to send their money to an urban centre where they trust more and instruct the recipient to go and collect. This apparently new phenomenon means less cost for receivers as they have to travel shorter.

A schematic mapping of the source and destination districts reveals that Ugandans and Tanzanians have widely penetrated throughout the two countries whereby about 35 towns in Tanzania send money to 30 towns in Uganda. In Tanzania 34 towns outside Dar es Salaam contribute to around 20% of the funds sent to Uganda, meaning low levels of business for the post offices located in these cities. Some of them like Mbeya, Mwanza and Dodoma handled between 17,000 TSH and 70 000 TSH only for the whole year of 2008 (see Table 16).

On the other hand, the wide geographical spread of towns in both countries where customers need to either send or receive money indicate the following: (i) potential demands for such services and especially for senders of small amounts of money (ii) widespread people-centred economic integration, which could be a basis for regional trade.

Table 16 Top Ten Tanzania Districts Remitting Cash via IFS (TSH) to Uganda

Ranked District 2006 2007 2008 Total, TZS Percent

DSM 52,545,606 184,185,376 162,027,207 398,758,189 80.17% Dodoma 1,237,000 12,817,067 80,000 14,134,067 2.84% Mwanza 6,766,500 3,696,000 17,000 10,479,500 2.11% Morogoro 4,173,490 3,290,000 1,630,000 9,093,490 1.83% Kyela 6,750,000 420,000 - 7,170,000 1.44% Tanga 1,520,000 5,147,000 640,000 7,307,000 1.47% Kigoma 2,090,000 4,005,000 1,578,000 7,673,000 1.54% Mbeya 1,137,400 4,250,000 20,000 5,407,400 1.09% Moshi 262,300 872,000 2,737,000 3,871,300 0.78% Zanzibar 814,000 3,197,946 978,000 4,989,946 1.00% Other 27 towns 11,042,650 8,181,900 5,495,000 28,507,550 5.73%

Source: This study, 2009.

A closer look at the pattern of source districts in Uganda also indicates that Kampala as the most dominant sender of funds to Tanzania, accounting for 74.2% in the last three years, followed by the mining town of Kasese (15.5%) and the business town of Jinja (almost 8%). The rest of the towns, five of them, share among them 2.4% of the funds sent to Tanzania using IFS in the last three years (see Table 17 and Figure 5). It is not clear why there was a huge surge of funds sent from Kasese and Kampala in 2007, which went back to 2006 levels in 2008. They were also the only towns which received funds sent through IFS services in 2008.

Table 17 Ugandan Source Districts of Funds Sent to Tanzania- 2006 to 2008

Town 2006 2007 2008 Total Percent

Kampala 2707458 8666491 2586526 13960475 74.22% Kasese 400000 1637500 880271 2917771 15.51% Jinja 662280 840000 0 1502280 7.99% Lira 0 52620 0 52620 0.28% Ruchere 133300 0 0 133300 0.71% Tororo 0 95890 0 95890 0.51% Kabale 66700 0 0 66700 0.35% Mubende 60000 0 0 60000 0.32% Entebbe 0 21000 0 21000 0.11% Total 4029738 11313501 3466797 18810036 100.00% Number Districts 6 6 3

Figure 2- Ugandan Districts Sending Funds (TSH) using IFS to Tanzania

Source: Table 17