Building local capacity to curb the trade deficit
Oct 15, 2019
This was followed by the Middle East which accounted for 26.5% of the total exports and these were driven by gold exports
UNBS headquarters in Kampala. The agency recently introduced a distinctive mark as a pass to regional markets
Uganda's trade continues to show prospects of improvement year by year albeit the persistent widening balance of trade deficit. Going by statistics from the Trade Ministry for the fi nancial year 2018/19, Uganda's exports increased by 12% from $3.53b (about sh13 trillion) in 2017/18 to $3.96b (about sh14.6 trillion) in 2018/19.
On the other hand, the total merchandise imported into the country drastically increased by 21% from $5.61b (about sh22 trillion) in 2017/18 to $6.78b (about sh25 trillion) in 2018/19. This means that the country's trade defi cit widened by about 35% or $740m (about sh2.73 trillion) from $2.08 billion in 2017/18 to $2.82b in 2018/19.
Amelia Kyambadde, the Trade Minister, attributed the widening trade deficit to fast growing high value imports, mainly of petroleum products, machinery, vehicles, vegetable products, animal, beverages, fats and oil as well as chemicals.
Gold over takes coffee
During the year under review, gold overtook coffee as Uganda's leading forex earner, fetching $1b (about sh3.7 trillion), according to the Uganda Export Promotions Board. Coffee, which has been Uganda's leading forex earner for long, came second with $446m (about sh1.65 trillion) during the year.
A number of products such as cotton, fish, sesame, tobacco, cocoa, base metals, beer, cement, plastics, sugar and mineral water also posted a two-digit one-year growth. Informal merchandise exports accounted for 13% of the total export revenues.
Export destinations
Records from the Trade Ministry show that the Common Market for East and Southern Africa (COMESA) was the biggest destination for Uganda's exports in the fi nancial year 2018/19, accounting for $1.77b (about sh6.5 trillion) or 44.8% of total exports. This was, however, a decline from $2.2b in 2017/18.
This was followed by the Middle East which accounted for 26.5% of the total exports and these were driven by gold exports to the United Arab Emirates, according to information form the Trade Ministry. These were followed by the European Union that accounted for 12.7% of total exports.
Import sources
In the financial year 2018/19, Uganda's imports were majorly sourced from Asia, which contributed 40.1% of the total imports. The other countries from where Uganda imported were China and India. The Middle East that contributed 16.5% of the total, European Union 14.1% and the Rest of Africa 11.9%