The Uganda shilling continued to strengthen against the US dollar in July 2020, registering an appreciation of 0.9% on account of increased inflows of foreign exchange.
The Uganda Revenue Authority (URA) has registered a revenue collection surplus of sh179b in July 2020 in excess of target.
According to the July 2020 Performance of the Economy report released by the finance ministry, the economy has started recovering from the COVID-19 induced economic crisis.
URA registered revenue collections of sh1.52 trillion against a target of sh1.49 trillion. Out of the total revenue collections for July, sh1,146b was tax revenue, while sh55.5b was from non-tax revenue.
Finance noted that there was a pickup in economic activity in July following the easing of lockdown restrictions. Another factor was the payment of some taxes that were supposed to be paid in the 2019/2020 financial year but spilled over into July.
There were delays in filling for taxes of imported goods as the movement was restricted during the same period and the government's policy of tax deferment during the lockdown. These caused more arrears to be paid in the month of July.
The Uganda shilling continued to strengthen against the US dollar in July 2020, registering an appreciation of 0.9% on account of increased inflows of foreign exchange. Export earnings increased for the second consecutive month to $337m in June from $290m in May.
The value of imports increased to $543m in June 2020 from $435m in May 2020. In June, Uganda registered a trade deficit of $85m with the rest of the East African Community (EAC) countries, partly because of restrictions imposed on Uganda's exports by some partner states.
Uganda's exports to the EAC region were valued at $79.9m while imports were worth $165.48m, meaning it had lost the trade surplus it had gained over EAC countries.
Earnings from gold exports exponentially grew to $161m (about sh597b) in June from $126m (about sh467.3b) in May. The $161.3m gold earnings of June are the highest Uganda realised from gold exports in the last one year.
The second highest was recorded in May 2020 ($126.3m) and the third highest ($104.6m) was realised in January 2020. Earnings from maize exports almost doubled from $3.5m in May to $6m in June 2020.
The earnings from fish and its products also increased from $9.8m in May to $10.7m in June. Coffee, which used to be the leading foreign exchange earner before it was overtaken by gold, experienced a decline from $42.5m of May to $40m in June.
It should be noted that the Government registered a revenue shortfall of sh3.2 trillion for the 2019/2020 financial year.
The report says the Government was able to collect sh17.3 trillion against a target of sh20.45 trillion. In February 2020, Parliament approved the government request to borrow sh2.43 trillion from Stanbic Bank to cushion for the revenue shortfall.