Uganda's trade deficits rises by 14%

Uganda’s trade deficit rose by 14% in June from the previous month, driven up by imports, amid falling commodity exports due to the euro area crisis, the Central Bank said. 

Neighbouring Tanzania also said its current account deficit nearly doubled in the year to June following a surge in oil imports for power generation. 

The deficit in Tanzania widened by 90.2% to $4.296b from $2.258b a year ago, largely due to a rise in demand for oil and higher prices on the world market. 

On the other hand, Uganda’s trade deficit climbed to $252m in June, from $221m in May, its central bank said in a report on Tuesday. 

It said the balance of payments position is expected to worsen in the months ahead as the Euro Zone crisis curbs remittances, foreign direct investment and earnings from exports of commodities. 

The euro area is the main buyer of Uganda’s fish, flowers and coffee exports. It is also host to a number of Ugandan immigrants who usually send money back home. 

Tanzania said its total imports bill rose by 29.6% to $12.958b, while exports increased by 13.3% to $7.99b from a year ago. 

“There was also a substantial increase in imports of machinery and equipment for gas and oil exploration,” said the central bank. 

Earnings from gold exports and the tourism sector went up during the period, the central bank said.