Uganda’s exports to United Arab Emirates, which continues to take the largest share, fell by 12 per cent on the account of a drop in gold receipts in March, according Bank of Uganda.
The Bank of Uganda report, released on May 4 indicates that export earnings to the region during March reduced to $444m (Shs1.642 trillion), down from $447m (1.653 trillion) in February.
Gold, which is the leading export commodity to the UAE declined during the period to $155m (Shs573b) down from $175m (Shs647b) in February.
“This was the lowest the country had earned in gold export since the $126m record in May 2020,” the report said, noting that exports to Middle East stood at $160m down from $179m in February.
Experts, including Dr Fred Muhumuza, an economist and lecturer at Makerere University School of Economics, said the decline could have been heightened by competition for the commodity with countries in the region, which are strategising to control gold re-exports from DR Congo.
“If you don’t control its (gold) sources you are competing with others who can pick it up from there. I think the success of Uganda refining gold here, has come into competition,” he said, noting much of Uganda’s gold exports are re-exports from DR Congo and South Sudan.
Uganda’s gold exports for the past five years have been growing, earning Shs2b (Shs7.6 trillion) for the period between February 2020 and February 2021.
Gold currently commands nearly 50 per cent share of the total export earnings with almost all of it exported to the Middle East, specifically to UAE.
Exports to the region are dominated by gold, which takes up an average of $1.9b (Shs7.3 trillion) of the $2b (Shs7.4trillion) earnings to the Middle East.
During March, Comesa was Uganda’s second largest export market, taking up at least $146m worth of goods up from $126m in February.
The increase was driven by an aggressive search for new markets, especially in DR Congo and South Sudan, as Uganda continues to face trade wars with traditional trading partners including Kenya, Rwanda and Tanzania.
Trade with Asia
The report notes that although Uganda imports much of its goods from Asia, the continent takes so little of its exports with India, which took up goods worth $10.7m, being the biggest destination. China took up exports worth $5.2m while Hong Kong, Malaysia, Pakistan each took up goods worth $4.5m, $2.7m and ($2.2m), respectively.