Overview:
In comparison to December 2021, export earnings increased from USD 323.96 million to USD 371.81 million representing a 15.1% growth.
Uganda’s merchandise trade deficit narrowed by 1.6% in the month of December 2022, a new report shows.
According to the Ministry of Finance Performance of the Economy report for January 2023, Uganda’s trade deficit narrowed to USD 294.9 million in December 2022 from USD 299.8 million in November.
A trade deficit occurs when a country’s imports exceed its exports during a given time period.
The report attributes the narrowing trade deficit to an increase in export receipts that more than offset the growth in the import bill during the month.
On the other hand, compared to the same month in 2021, the merchandise trade deficit widened by 0.4% from USD 293.7 million to USD 294.9 million in December 2022, following a higher increase in the import bill which more than offset the growth in export earnings.
Uganda exported merchandise worth USD 371.81 million in December 2022 indicating an increase of 10.7% from USD 335.77 million registered the previous month. This growth was attributed to increased receipts for maize and mineral products, among others.
Maize exports increased from USD 4.34 million in November 2022 to USD 20.48 million in December 2022. This rise was partly due to the onset of the maize harvesting season as well as the heightened demand for Uganda’s maize by the neighbouring countries.
However, the report says that there was a 7.2% decline in the value of coffee export earnings from USD 64.14 million in November 2022 to USD 59.54 million in December 2022.
“This was mainly attributed to lower export volumes as a result of dry weather conditions from April to August 2022 in most parts of the country’s coffee-producing regions, which led to lower yields,” the report says.
In comparison to December 2021, export earnings increased from USD 323.96 million to USD 371.81 million representing a 15.1% growth. This growth was on account of increased earnings from commodities such as maize, mineral products, beans among others.
EAC remained the major destination for Uganda’s exports accounting for USD 227.08 million (61.1%) of the total exports during the month. In particular, Kenya (USD 71.19 million), D.R.C. (USD 57.01 million) and South Sudan (USD 50.98 million) received 78.9% of the total exports to the EAC.
European Union was the second major destination for our exports accounting for 15.3%, followed by Middle East at 6.9%. At country specific level, 45.8% of the exports to EU went to Italy and 17.5% to Germany. It is worth noting that in December 2022, Italy maintained the highest market share for Uganda’s coffee, followed by Sudan and Germany.
The value of merchandise imports increased by 4.9% to USD 666.71 million in December 2022 from USD 635.60 million in November 2022.
“This growth was mainly attributed to the higher volumes of private sector goods imported. In particular, the private sector imports which had the largest increases were mineral products; textile and textile products; wood and wood products; and chemical and related products,” the report states.
In comparison to the same month in 2021, imports grew by 8.1% from USD 616.71 million in December 2021 to USD 666.71 million in December 2022. This was mainly driven by increased import volumes for petroleum products, machinery equipment, vehicles & accessories over the period.
In December 2022, Asia remained the largest source of Uganda’s imports, accounting for USD 302.68 million of Uganda’s total imports, with China and India contributing 50.5% and 19.2% of the merchandise respectively. The second largest source was Middle East (USD 143.38 million) followed by EAC (USD 90.65 million) and European union at USD 66.61 million