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Labour export companies have suspended operations

Labour export companies make case for business resumption; Govt responds

Secondly, government is said to have been earning Non-Tax Remittances estimated at Shs2.2 billion monthly before the suspension of externalization activities due to Covid-19.
posted onOctober 17, 2020

Companies involved in the labor externalization business announced Friday that they had suspended operations awaiting the government's plan on reopening the sector.

The action was activated by the Ministry of Gender, Labour and Social Development October 15 press statement which included information that did not sit well with the Uganda Association of External Recruitment Agencies (UAERA).

One of the suggestions that ruffled UAERA's feathers was having the sector re-opened in a phased manner, starting with "clearance of all categories of migrant workers other than domestic workers.”

The Association says the idea is as good as keeping the sector closed since most of the companies are involved in externalization of domestic workers.

"The Ministry can confirm from the statistics in its records that almost 90% of labour recruitment companies are engaged in externalization of domestic workers," Baker Akantambira, the chairperson of UAERA said in a 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."

The Association, which also took aim at the ministry for making decisions about the sector without consulting stakeholders, says labour companies are now closed and all consultations are now in the hands of the ministry.

"... all labour externalization companies will officially close business with immediate effect," reads the statement. "... going forward, the general public is advised that following the closure of labour companies, they should consult the Ministry of Gender Labour and Social Development on all aspects pertaining to externalization of migrant workers."

Why re-open now

The Association says 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.

Secondly, government is said to have been earning Non-Tax Remittances estimated at Shs2.2 billion monthly before the suspension of externalization activities due to Covid-19. More importantly, foreign remittances from labour exportation are estimated at $700 million annually.

“To date, there are more than 165,000 Ugandans who are gainfully employed in the Middle East through this program. According to the recent statistics, the annual remittances from migrant workers in the Middle East alone into the country currently had grown to over USD700 million and domestically, the sector has also been contributing direct employment opportunities to over 4,000 Ugandans through the 200 licensed labour externalizing companies, several pre-departure training institutions and other numerous opportunities through back and forward linkages with sectors such as hotels, airlines and transport,” reads the UAERA’s Friday statement.

“In revenue terms, the sector has been contributing huge non-tax revenue to government agencies through the 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.”

When the borders and the airport re-opened recently, some unscrupulous individuals started exploiting the suspension to perpetuate human trafficking and labour recruitment companies say they could end up carrying the blame.

For instance, 31 ladies destined for the Middle East were intercepted by the Aviation Police on October 12. On October 15, another group of 44 ladies were also intercepted as they were being trafficked to the Middle East.

“These and many more cases of human trafficking that could have not been documented are happening because the industry is under closure,” the Association argues.

However, the ministry’s spokesman Frank Mugabi says it’s “not true” that the closure of recruitment companies is the cause of the said cases since even before Covid Uganda was recording cases of human trafficking.

The companies also say they have been forced to close up shop and suspended operations due to rent, salary arrears and other operating costs in their places of operations after they spent the bigger part of the year without working.

Mugabi says the companies have rushed to make decisions since it’s not even a month since the airport was re-opened.

He says the government is taking time to study the situation so that issues like the safety and health of Ugandans travelling abroad are well-catered to.

“For us to reopen we need to have SOPs… we need to take care of important questions,” he said, adding that they’ll soon meet with the Association. “We are going to have a meeting with them and we shall reach a compromise,” he said.

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