Uganda improves trade balance with world 

Uganda’s trade with the East African Community (EAC) continues to grow in its favour, registering a trade surplus in January 2024, but is yet to reach the levels recorded in the same month a year ago.

According to the latest national statistics, merchandise trade registered a surplus of $80.6 million in January 2024, which was higher than the December surplus of $22.3 million.

However, this is still far below the 180 million surpluses recorded in January 2023. This surplus mainly came from higher exports than imports traded with the Democratic Republic of Congo, South Sudan, Kenya, Rwanda, and Burundi, with only Tanzania recording a surplus against Uganda. 

Against the Middle East, the country made a surplus of $71.5 million, a drop from $99.7 million the previous month, while export values to the European Union exceeded imports from there by $44.93 million.  

Trade, especially to the EU was largely boosted by coffee which amounted to $85.57 million in January 2024, a 30 per cent increase in value from $65.94 million registered in December 2023, according to the February economic performance report by the ministry of Finance, Planning and Economic Development. 

However, despite an improvement, there was a trade deficit between Uganda and the rest of the world which narrowed by 30 per cent to $188.14 million between December to January this year, due to a decline in imports which more than offset the decline in export receipts.

Overall Uganda exported merchandise worth $565.40 million in January, which is lower by 8.3 per cent than in the previous month. The ministry attributed this mainly to lower export earnings from gold, beans, oil re-exports, and tobacco during the month. 

The value of merchandise imports decreased by 15 per cent from December 2023 to $753.5 million in January in January 2024, mainly because of lower private sector imports, particularly mineral products (excluding petroleum products), textile and its products, machinery equipment, vehicles and their accessories, among others.

In comparison to the same month the previous year, monthly merchandise exports grew by more than a third to $565.4 million in January this year, due to better export earnings from gold, coffee, and oil re-exports among others. The increase in coffee export earnings was attributed to a rise in the average price from $2.74 a kilo in December to $2.96 in January 2024.

But there was also an increase of 20 per cent in the volumes exported, to 480,000 bags. When compared with the same month the previous year, earnings from coffee exports grew by 27 from January 2023 to $85.57 million in January 2024, mainly due to better prices on the global market, driven by continued concerns over supply, especially in Indonesia and Vietnam.

The US Department of Agriculture in Indonesia says that excessive rainfall has disrupted the cherry development stage and lowered yields in major Robusta-producing areas. In Vietnam, factors such as decreased land, rising labour and fertilizer expenses, and farmers switching to alternative crops have caused a drop in production.

The EAC remained the top destination of Uganda’s exports, accounting for 38.2 per cent of the total exports, with Kenya being the largest market with a share of 30.4 per cent of the total exports to the region.

The Middle East and the EU emerged as the second and third top destinations for Uganda’s exports, accounting for 26.4 and 17.5 per cent respectively. The United Arab Emirates accounted for 97 per cent of the Middle East’s market share of Uganda’s exports.