Uganda registers trade surplus of $25.32 million with EAC in August –Finance
Uganda registers trade surplus of $25.32 million with EAC in August
Unlike in the past, during the month of August 2021, Uganda’s trade position with the EAC and the Rest of Africa improved from deficits of $64.93 million and $63.61 million to surpluses of $25.32 million and $45.96 million respectively.
This development implies that there has been a stable increase in trade volume between Uganda with East Africa and the rest of Africa countries.
Compared to August 2020, the Ministry of Finance Planning and Economic Development said in the economic performance report for the month of September 2021 that there was a turnaround in Uganda’s trade position with the Middle East from a surplus of $179.86 million to a deficit of $73.43 million in August 2021 mainly due to a slowdown in exports of gold to the region.
However, the ministry of finance said despite an increase in export receipts for items like coffee, tobacco, fish and its products, export receipts declined for the third consecutive month.
The Ministry of Finance said this is mainly attributed to the decrease in gold exports as the government imposed a 5 percent levy on each refined kilogram of gold and a 10 percent levy on each kilogram of unrefined gold exported out of Uganda which affected exports in July and August 2021.
As a result, the Finance Ministry said Uganda’s value of exports declined from $433.96 million in August 2020 to $292.67 million in August 2021.
Compared to July 2021, export receipts declined by 2.75 percent from $433.96 million to $292.67 million in August 2021. This decline was mainly attributed to decline in cotton, maize and tobacco among others over the period.
For the second month running, the EAC was Uganda’s largest destination of exports accounting for 36.6 percent of the total export receipts in August 2021. This was followed by exports to the rest of Africa and European Union at 28.25 percent and 21.4 percent of total exports respectively.
Notably, the Ministry’s report indicate that exports to the Middle East in August 2021 fell to $5.69 million from $225.35 million in August 2020 following a drop in exports of mineral products to that region.
It says Uganda’s merchandise trade deficit widened on both an annual and monthly basis. Compared to July 2021, the deficit widened from $196.4 million to $248.8 million in August 2021.
This was as a result of an increase in the import bill coupled with a slight decrease in the export earnings for the month.
In August 2021, Uganda’s import bill amounted to $541.5 million, an 8.3 percent growth from the $496.8 million recorded in July 2021.
This growth was mainly on account of increase in imports for prepared foodstuffs, beverages, tobacco and petroleum products in August 2021 as economic activity continued to pick up after the lock down imposed to curb the spread of COVID-19 in June 2021.
Over the same period, government imports grew from $18.65 million to $37.81 million while formal private sector imports grew by 5.1 percent as economic activity continued to recover.
Compared to August 2020, the import bill declined by 23.1 percent from $666.47 million to $541.48 million in August 2021.
This was mainly due to a reduction in the mineral products (excluding petroleum products) following the imposition of a 5 percent levy on each kilogram of refined gold and a 10 percent levy on each kilogram of unrefined gold which disincentivized the importation of this product.
Asia remained the largest source of Uganda’s imports in August 2021 accounting for 45.8% of all total imports during the month. Other notable sources were the EAC, Middle East and European Union at 15.1 percent, 14.6 percent and 12.1 percent respectively.
