ABSTRACT

A booming interest on the topic of Diaspora remittances has developed over the past few years on the part ofacademics, donors, international financial institutions, commercial banks, money transfer operators, microfinance institutions, andpolicy makers, The surge of remittances to countries of origin in the last two decades, exceeding aid and foreiqn direct investment (FDI) to developing countries, has reignited debate on their development potential in receiving countries. Alongside the interest in remittances, there is also growing recognition of the importance of transnational practices in shaping the relationship between remittances and economic growth. The main objective of this study was to examine the relationship between remittances and economic growth in Uganda (1993-2017). Specific objectives: To invest,gate the long run relationshio between remittances on Economic growth in Uganda (1993-2017), To examine the effect ofremittances and economic growth in Uganda (1993-2017). The data used was sourced from UN data, Word Sank, BOU for the period 1993 to 2013. Augmented Dickey- Fuller (ADF), Philio-perron (PP) tests were carried out on the variables and were found to non-stationary at level but stationary after first difference, The study employed co-integration to test the long run relationship between remittances and economic growth and regression analysis- to examine the effect of remittances on economic growth, and from the discussion of the findings, it can be concluded that the remittances are the among the most sígnificant factors influencing positively the economic growth in Uganda., Since the remittances have positive relationship with economic growth, therefore there is need to optimise the volume of remittances because the country with the hiqh remittance level boosts the economy through domestic saving and in the long run investment and increased positive growth effects of remittances are most likely to occur when remittances are transmitted in formal channels, incentives that make remitting money using formal channels cheaper as compared to the informal ones should be provided.