Gold sustaining exports growth, says Finance Ministry
The rate of growth in export earnings was 67 per cent during May. PHOTO / FILE
Uganda’s earnings from commodity exports increased by 6.7 per cent, growing to $455.2m in May from $426.5m in April.
According to the Ministry of Finance Monthly Performance of the Economy report for June, the growth was due to higher receipts from mainly non-coffee exports, among them mineral products, electricity, tea and beans among others.
Gold, a key component in the mineral exports category, has become a major revenue earner for Uganda, making up at least 44 per cent of export receipts.
According to the report, Middle East remained Uganda’s top export destination during the period, accounting for 42.7 per cent of total exports.
However, this was a slight decline compared to 44.3 per cent in May 2020.
Other major export destinations included the East African Community with 25.6 per cent, Rest of Africa (13.64 per cent) and European Union (11.62 per cent).
However, the merchandise trade deficit widened by 50 per cent on a month-on-month basis from $269.2m in April to $322.1m in May.
This was mainly on account of an increase in the import bill, which more than offset the growth in export receipts over the same period.
“Compared to May 2020, the merchandise trade deficit widened by 123 per cent in May 2021, reflecting a recovery in import demand. During the month, the value of imports increased at a much faster rate than the increase in exports,” the report notes.
Imports increased during May, growing by 11.7 per cent from $695.8m in April to $777.3m in May.
The increase was attributed to growth in both government and private sector imports due to improvements in global supply chains following easing of lockdown measures that had been put in place to contain the spread of Covid-19 across the globe.
Government imports increased as a result of growth in project-related imports.
Asia remained the main source of Uganda’s imports, increasing its share from 32 per cent a year ago to 35.3 per cent in May.
EAC and Middle East came in second and third, respectively accounting for 28.5 per cent and 11.8 per cent.
Uganda’s imports from Tanzania, which accounted for 19.2 per cent of the total imports bill during the period, have been growth since the start of the year.
However, the report does not give details of what Uganda imports from Tanzania.
