Uganda has registered a significant increase of the trade surplus it enjoys with countries within the East African Community (EAC).

According to the latest performance of the economy report which the finance ministry released, Uganda had a total trade surplus of $130.4m (sh502.3b) with the EAC countries in August.

The report indicates that Uganda’s trade surplus with EAC countries has more than tripled from the $40.5m trade surplus realised in May to $94.9million in June and, eventually, to $130.4m in August.

On a country-specific level, Uganda, in August, traded at surpluses with South Sudan ($62.73m), Democratic Republic of Congo ($54.56m), Rwanda ($3.94m), Burundi ($9.8m) and Kenya ($0.74m) while a small trade deficit was recorded with Tanzania at $1.41m.

The report also indicates that the value of Uganda’s exports to all continents of the world has significantly increased from $306.9m recorded in July 2021 to $379.1m in July 2022.

The significant rise in the country’s export earnings is attributed to higher earnings from coffee, sugar and fish exports.

Meanwhile, the government, through Uganda Revenue Authority (URA), has collected sh1847.5b in the month of August, against a target of sh1794.2b.

According to the August performance of the economy report, the government also received a total of sh43.79b in grants from development partners.

The August revenue performance has generated a surplus revenue of a total of sh53.3b in excess of the projected revenue collection.

The performance of the economy report for July indicated that URA had registered a revenue surplus of sh94b in July, which was collected in excess of the target of sh1642.38b.

The good revenue collection performance is attributed to mainly higher collections for taxes on international trade during the month.

The revenue collection target government set in the current financial year in the 2022/2023 national budget is sh25.5trillion, up from sh23trillion in the previous financial year.

In the tentative projections for the next financial year of 2023/24, the government has set an ambitious revenue collection target of sh29.7trillion.

In the recent National Budget Conference, development partners advised the Government to improvise various ways of widening the country’s tax base to limit resorting to borrowing as a way of controlling the public debt, which is currently estimated to be over $20b.

Government expenditure

According to the report, government expenditure in August was to the tune of sh2.6trillion.

The Government expenditure in August, according to the report, was less than projected, due to limited revenue received from other sources, especially the development partners.

In the release for the first quarter expenditure covering the months of July, August and October, the amount of money released (sh10.2trillion) was less by sh4.3trillion.

The August 2022 performance of the economy report further indicates that wages and salary payments during the month were to the tune of sh591.45b.

As part of the government commitment to support the private sector, a total of sh327.8b was released in August by the government to clear domestic arrears, which are predominantly payments that went to companies that had supplied goods and services to the government.

Legislators say

State minister for finance and Ntenjeru North MP Amos Lugoloobi attributed the doubling of Uganda’s trade surplus with EAC countries to the newest members of the East African countries.

“South Sudan and DR Congo are the newest members in the community where Uganda exports so much.

“Apart from the comparative advantage we have in agricultural products in the region, we are also exporting manufactured goods to these countries. The trade surplus we are enjoying are some of the benefits we are getting from the EAC economic integration,” Lugoloobi stated.

He said the earnings from coffee are increasing mostly because the global prices have been increasing and the country’s production levels too.

Opposition chief whip John Baptist Nambeshe says whereas Ugandan farmers have been mobilised to increase coffee production and that the global prices for coffee have greatly increased, they (farmers) are getting peanuts.

“I heard that whereas a farmer sells a kilogramme of coffee at between sh6,000 and sh7,000, on the international market it is sold at sh77,000.

Nambeshe said the deal government had given to Vinci Coffee Limited to have exclusive rights to buying Uganda coffee would have worsened the situation.

Parliament in May asked the government to terminate its agreement with Vinci Coffee Limited, arguing that it had disadvantaged other coffee companies in the country by giving it the monopoly of buying the nation’s coffee.