
Getting Money out of Uganda - tosbourn
http://tosbourn.com/getting-money-out-of-uganda
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exelius
My guess is that this situation is not an accident. Corrupt officials in many
African countries make a lot of money off of their citizens by denying them
access to international commerce unless they go through the right intermediary
(usually a relative of the corrupt official). Hence the 35% markup the author
mentions -- if there was anything resembling a free market, the markup would
be lower. This markup effectively functions as a tariff targeting
multinational companies: you can bring money into the country easily, but if
you want to remove it, you have to pay. And the money likely goes right back
into the hands of the bureaucrats and their relatives.

There are many places in this world where laws are used simply as tools to
maintain the wealth of the ruling class. If you come up with a business that
tries to disrupt their order, they will simply invent some tax evasion charges
and seize your assets. You'll probably lose because the judge is also a
distant relative who is in on the entire scheme.

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walshemj
That is why I was told that the Postmaster general was a plum job in third
world countries it gave you direct access to the telecoms interconnect fees
and why for the longest time it was so expensive to call those countries.

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ChuckMcM
To be honest I was thinking this was the punch line to something that started

 _" Dearest Person; I run a very successful website in <far away place> and
have accumulated <very large number> of dollars which I cannot get out of the
country without your help ..."_

However, since that wasn't the case, is it simply that countries without a
developed banking system have issues? I would expect the normal path here
would be to establish an account with a bank in the country, build enough
local infrastructure to allow for transactions to and from that bank, and also
for wiring money from that bank to other banks that are closer to you.

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nowarninglabel
Correct. We work in Uganda without problem doing wire transfers for funds
in/out. There is nothing particularly problematic about this for Uganda unlike
some countries we work on.

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tosbourn
Did you have to physically be there to open the account or were you able to do
it all online/over the phone?

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nowarninglabel
We have folks on the ground, so yes physically there.

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pakled_engineer
You get a business or corporate account with Ecobank and then collect payments
with it. They even do teller implant services so you can open a storefront in
Kampala and they will staff it with somebody who can collect payments in
person to deposit to your Africa wide account which you later can then SWIFT
wire transfer anywhere you want.

Another method is simply become your own XpressMoney or RIA agent (avoid WU),
and then instead of having to physically go check for funds you can load up
your agent account and immediately see the funds are there.

There are plenty of large European payment gateways that have local African
payment methods like cash bank deposits you can use but some of them take a
month to settle payments.

You could also roll your own voucher type system. Various traders in Uganda
buy vouchers from you then resell them p2p so the money never leaves your bank
account while changing hands all over Africa. The customer enters a PIN to
split the voucher or deposit it to their betting account. This requires a
competent crypto engineer obviously. Could even use your own centrally mined
alt-cryptocurrency. Or you could partner with storefont money changers with a
lot of branches in Uganda to accept money on your behalf (like selling PIN
codes) that way they already have all the local licenses and satisfy ID
requirements for payments in/out and your company only handles business to
business payments eliminating all kinds of problems with regulators.

Edit: there's also World Bank publications you can read to discover easier
money transfer corridors like Masterlink which is a Uganda->UK service
[http://www.amazon.com/dp/0821384309](http://www.amazon.com/dp/0821384309) or
USAID publications
[http://solutionscenter.nethope.org/assets/collaterals/Uganda...](http://solutionscenter.nethope.org/assets/collaterals/Uganda_Market_Assessment_and_Case_Studies_Final.pdf)

You can also ask your embassy in Uganda for a financial report telling them
you need information on the local banking and money transfer systems. I did
this for Kenya and received a very detailed pdf with exact fees of each
service, bank recommendations for trading ect.

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tosbourn
Oh wow – this is very informative, thank you so much.

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chewbacca182
Bitcoin might be the answer

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IkmoIkmo
It may be later this year or the one after. There's no real market in Uganda
for bitcoin right now. If you hustle long enough you'll surely find someone
looking to buy or sell, a local businessman or expat for example. But nothing
structural.

But Bitpesa has been pretty successful in neighbouring Kenya with a bitcoin
remittance product, and has started to provide bitcoin liquidity because of it
in Kenya. This means that already, if you'd have approached Bitpesa in the
past months from Uganda, that it's likely quite easy to have procured bitcoin
from them as Kenya-Uganda money transfer isn't the hardest thing in the world.
(fun fact, Kenya's MPesa actually has a pretty significant presence in Uganda,
too, and Bitpesa uses MPesa for their payouts)

These bitcoins can easily be sold in most OECD countries particularly North
America & Europe, but actually all continents nowadays to a large extent with
the exception of Africa. But Bitpesa recently announced more official plans to
move into new markets like Ghana, but also including Uganda.

So bitcoin is a possible solution, although not necessarily as quick & easy as
it can be, and likely will start to become, in the next few years as companies
like Bitpesa expand and encourage other enterprises to follow suit.

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tosbourn
Thanks for this – I will look into this a bit more.

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aresant
I recently had lunch with a guy that set up telecom networks in ex-soviet bloc
countries in the years following the fall of the Berlin Wall.

He worked with American / Euro companies and interfaced with the hard-scrabble
governments that were in the power tug-of-war at the time.

One of the most complicated tasks he ran into was moving money in-and-out of
the countries, largely due to currency de-stabilization.

His solution was to buy hundreds-of-tons of grapes in the local currency, and
then transport the grapes to Greece where they could be exchanged for
international currency.

This was in the early 1990s, fairly recent history, but it still baffles me
that these sort of problems still exist at the scale that they do.

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tosbourn
New business – Country Moving Grapes as a Service.

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kephra
Hawala حوالة could be an option, if you know wealthy Jewish or Muslim in your
country. They certainly do business, and know how to transfer money.

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jalayir
But it's illegal... in most countries hawala is illegal, and prosecuted under
various money laundering laws.

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xtrumanx
That's most definitely not true. I know a hawala company that has offices in
several western nations like the U.K. and Australia and they're not operating
illegally to my knowledge. They essentially work like Western Union and simply
operate in markets Western Union does not serve.

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ptaipale
Might still be illegal in Uganda. Enforcement of bans or regulation can be
erratic of course.

(Hawala is apparently completely illegal in India and Pakistan).

