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Export earnings decline to $276m

By Vision Reporter

Added 29th October 2009 03:00 AM

UGANDA’S export receipts declined to $276.8m at the end of August, down from $307.7m in July.

By Sylvia Juuko

UGANDA’S export receipts declined to $276.8m at the end of August, down from $307.7m in July.

Mary Katarikawe, the Bank of Uganda director for research, attributed the fall to the drought that hit the country’s informal cross-border trade (ICBT) exports.

“A trade deficit was registered in August on account of reduced ICBT exports that were attributed to drought-related food and industrial supply constraints,” she said.

Katarikawe was addressing a press briefing at the bank’s offices in Kampala on Wednesday.

The central bank figures show that ICBT exports declined to $153m in August, down from $188.7m in July.

Informal cross-border trade exports comprise mainly maize, beans, sugar, bananas, fish and industrial products.

According to Katarikawe, the decline in exports led to the reduction in Uganda’s balance of payments surplus to $37m in August as opposed to $84.8m in July.

She added that total imports also declined by 2.7% to $313m in August, down from $321.8m in July.

Out of the total imports, the private sector bill amounted to $297.7m in August, which was 2.5% higher than the preceding months.

“The rise in the private sector imports partly reflects the appreciated shilling against the dollar,” Katarikawe said.

She explained that the shilling had appreciated against the US dollar due to inflows from offshore investors and agricultural export proceeds amid low demand for the US dollar during the period under review.

The local unit is currently trading at 1,880/1,885 per dollar compared to 1,960/1,970 in September.

The private sector mainly imports oil, machinery, vehicles and accessories, chemicals, vegetable products, animal fats and base metals.

The central bank’s economic and financial indicator’s report showed that the private sector credit slowed to 25.2% in August compared to 26.6% in July.

“The slow down in credit growth could be attributed to tighter credit extension conditions associated with risk awareness of banks,” said the report.

The gross foreign reserves increased to $2.6b at the end of August from $2.5b the previous months.

This was equivalent to over five months of future imports of goods and services.

Export earnings decline to $276m

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