Uganda’s spending on imports declines, says Finance Ministry

Uganda’s spending on imports declined to $127.21 million in April 2020, compared to a deficit $175.97 million in March 2020, a new report by the Finance ministry shows.

In the report published this week, the Ministry of Finance, said Uganda’s merchandise trade deficit narrowed during the month of April 2020, following a higher reduction in imports that more than offset the fall in exports.

“The deficit was $127.21 million in April 2020, compared to $175.97 million in March 2020,” the Ministry of Finance said.
The Ministry of Finance explains that the reduction in the deficit follows a higher decline in the import bill that more than offset the drop in export receipts.
“Compared to April 2019, the merchandise trade deficit narrowed by 63 per cent from $343.57 million to $127.21 million in April 2020. The narrowing of the deficit, year-on-year, is also explained by a greater decline in the import bill that more than offset the fall in export receipts,” said the Ministry of Finance.
Globally, imports and exports have all been disrupted by the Covid-19 pandemic resulting in reduced demand for goods and services, which implies that both the government and private sector was not importing, as they were doing before the Covid-19 struck the global and the national economies.
During the period, government imports declined by 38.5 per cent driven by a drop in project imports, whereas; private sector imports fell by 30.7 per cent as both oil and non-oil imports recorded reductions. There were drops in mineral products (excluding petroleum products), petroleum products, machinery equipment, vehicles and accessories; base metals and their products; and chemical and related products.
In comparison with April 2019, merchandise imports fell by 49.1 per cent following a decline in both government and private sector imports.

Source of imports
Asia was the largest source of imports into Uganda, with a share of 44.3 per cent. The Middle East and EAC contributed of 14.1per cent and 13.5 per cent, respectively, making them the second and third largest sources.

Imports from Asia were mainly from China (36.4 per cent), India (30 per cent) and Indonesia (10.4per cent). The bulk of imports from the EAC region was from Kenya and Tanzania, accounting for 56.7 per cent and 42.8 per cent, respectively.
On the side exports, the Ministry of Finance said during the period, the exports declined by $108.37 million, from $315.52 million in March 2020 to $207.15 million in April 2020.
Export receipts continued declining in the month of April 2020 (both on a monthly and annual basis); as Uganda continues suffering from the effects of the Covid-19 pandemic. Compared to the same month last year, export receipts declined by 33.8 per cent from $ 313.01 million to $207.15 million in April 2020.
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