Overview:
The deficit was driven by a 10.3 percent drop in export earnings from the region, alongside a 2.3 percent increase in imports.
Uganda recorded a trade deficit of USD 16.92 million with East African Community (EAC) partner states in February 2025, marking a significant reversal from the USD 12.2 million surplus recorded the previous month, according to the latest Performance of the Economy Report for March 2025 released by the Ministry of Finance, Planning and Economic Development.
The deficit was driven by a 10.3 percent drop in export earnings from the region, alongside a 2.3 percent increase in imports. This shift highlights the volatility of Uganda’s trade balance within the regional bloc and reflects ongoing imbalances in cross-border trade dynamics.
Despite the overall deficit, Uganda continued to enjoy trade surpluses with several of its neighbors. In February, the country posted positive trade balances with:
- Democratic Republic of Congo (DRC): USD 61.95 million
- South Sudan: USD 39.38 million
- Rwanda: USD 20.23 million
- Burundi: USD 6.50 million
These surpluses underscore the strong demand for Ugandan goods in the region’s newer and more import-reliant economies, particularly in post-conflict or recovering states such as South Sudan and eastern DRC.
However, Uganda’s trade with the bloc’s more industrialized members told a different story. The country registered a deficit of USD 9.53 million with Kenya and a much wider deficit of USD 135.55 million with Tanzania. Tanzania remains Uganda’s largest source of imports within the EAC, with petroleum products and food items such as rice and sugar among the major contributors to the trade imbalance.
Despite the month-on-month decline in export earnings, Uganda’s performance compared to the same period last year shows improvement. Exports to EAC states rose by 10 percent, from USD 191.75 million in February 2024 to USD 210.96 million in February 2025. The growth was largely driven by increased exports to Tanzania and Kenya, suggesting improving trade linkages and market access to those countries.
Imports from EAC countries also grew, albeit modestly, rising by 2.4 percent year-on-year, from USD 222.61 million in February 2024 to USD 227.88 million in February 2025.
The shifting trade dynamics within the EAC point to both opportunities and persistent challenges for Uganda. While trade surpluses with countries like South Sudan and DRC reflect Uganda’s growing influence in fragile economies, the deficits with Kenya and Tanzania highlight the need to strengthen local production, improve competitiveness, and reduce dependence on imports—especially for petroleum and manufactured goods.
Economists have noted that the widening deficit with Tanzania also underscores broader regional logistics and policy issues, including high transport costs, non-tariff barriers, and limited value addition in Uganda’s export basket.
As the East African Community moves to deepen economic integration through initiatives such as the African Continental Free Trade Area (AfCFTA) and the EAC Monetary Union, analysts say Uganda must invest in production capacity, infrastructure, and trade facilitation to balance its regional trade position.
The Finance Ministry report offers a window into the complex, evolving landscape of Uganda’s trade with its closest neighbors—one that is shaped by both short-term fluctuations and long-term structural shifts.