Uganda’s import bill has dropped by 46.6 per cent, the lowest in three-years, according to data from Bank of Uganda (BoU).
Data running for the period to April indicates that imports declined as a number of source markets locked down much of their economies due to Covid-19.
During the period, Uganda imported goods worth $334m (Shs1.2 trillion) down from $491m (Shs1.8 trillion) in March.
The drop is also an indication of the continued drop in economic activity, which has mainly been disrupted by a slowdown in the entry of both finished products and secondary inputs.
However, the decline presents an opportunity for both government and the private sector as the country seeks to pursue an new agenda of import substitution amid challenges presented by Covid-19.
The import bill, data shows dropped by close $139m (Shs517b) just within one month. According to BoU , Uganda spent $315m (Shs1.1 trillion) on formal private sector imports while $40m (Shs148b) was spent on oil imports.
Government imports, which mainly included projects inputs, stood at $19.2m (Shs71.2b).
During the period, the report indicates, Uganda imported much of its products from Asia, with the country spending at least $148.1m (Shs547b) on imports from the region.
This was a reduction compared to $243m (Shs901b) that had been spent in March.
All source countries in the region including China, India, Indonesia and Japan indicated a decline in imports to Uganda.
Uganda spent $47m on imports from the Middle East while $43m was spent on imports from the rest of Africa. Imports from Comesa stood at $41m during the period from $74.8m (Shs276b) in March, according to the report.
At least $25.6m was spent on imports from Kenya down from $53.4m that had been spent in March, which represented a 108 per cent decline.
Good and bad
According to Dr Fred Muhumuza, a lecturer at Makerere University and an economist, the fall in the import bill is both good and bad because whereas it presents opportunities it might be an indication of a decline in economic activites.
He argues that the decline might prevent a drain out on the dollar at a time when there is low foreign exchange inflows.
“We import a lot of raw materials and goods that are not needed now,” he says, explaining that it might only be bad because government, in the process, is losing a lot of taxable income, jobs in logistics, clearing, warehousing and a slowdown in forex exchange market activities.