Govt imports drop by Shs525b

Friday July 26 2019

Drastic fall. A reduction in government

Drastic fall. A reduction in government purchases forced a drastic fall in imports for the month on May compared to April. FILE PHOTO  

By Dorothy Nakaweesi

Government imports fell in May recording $18.1m (Shs66b) worth of goods and services up from $160.2m (Shs592b) in April.
The decrease indicates a 769 per cent fall that was mainly precipitated by a fall in government project expenditure from $102.1m (Shs377b) in May to $18m (Shs66.6b) in April.
Non-project government imports, according to the Bank of Uganda (BoU) report released recently, fell from $58m (Shs214b) in April to $0.17m (Shs629m).
The fall in government expenditure during May, the report notes, forced Uganda’s import bill to fall by about 21 per cent.
Imports have been growing, therefore, the fall could be a signal of a change of fortunes as government seeks to promote exports and local consumption.
Government is currently pushing to enhance local consumption and production through the ‘Buy Uganda Build Uganda’ policy, which emphasises growing local capacity for indigenous producers.
The BoU report indicates that Uganda, in May imported a total of goods worth $665m (Shs2.4 trillion) compared to $701m (Shs2.6 trillion) in April.
However, private sector imports during the period increased from $498m (Shs1.8 trillion) in April to $529m (Shs1.9 trillion) in May.
Dr Fred Muhumuza, an economist and lecturer at Makerere University, said decline in government imports could have largely been due to the closure of the financial year with many departments holding back on projects.
“Many of them [government officers] may have been advised to halt procurement processes and transfer them to the following financial year,” he said.
During the period, mineral imports (excluding petroleum products), machinery, vehicles and accessories imports recorded the biggest share of imports.
Mineral imports increased from $90.4m (Shs334b) to $102m (Shs377b) in May while machinery equipment, vehicles and accessories imported goods worth $101m (Shs373b) up from $94.8m (Shs351b). Dr Muhumuza said gold imports, whose source is not known could, explain the increase in mineral imports.
“A lot of gold comes into Uganda. Its entry is recorded as import and later re-exported,” he said.
Other imports in the period included vegetable products, animal, beverages, fats and oil, base metals and their products and miscellaneous manufactured articles.
The BoU report also indicates that imports for oil and related products remained stable, recording $84m (Shs310b) in the period.

In April, Uganda registered a record growth in both imports posting $606m (Shs2.2trillion) in the period – the highest ever. The country also registered growth in exports in the month exporting mainly gold, which fetched $363m (Shs1.3 trillion) compared to $70m that was earned in February.