Uganda’s merchandise exports nearly double as trade deficit narrows sharply

Kampala — Uganda’s merchandise exports nearly doubled in October 2025, driven by strong performance in coffee, gold and other key commodities, significantly improving the country’s external trade position.

According to the Performance of the Economy Report for November 2025 released by the Ministry of Finance, Planning and Economic Development, export earnings surged by 94.4 percent year-on-year, rising from $769.62 million in October 2024 to $1.5 billion in October 2025.

The strong growth was largely attributed to higher earnings from coffee, gold, crude oil products derived from simsim, palm oil and sunflower, as well as industrial products, cocoa beans and flowers.

Coffee exports remained a major contributor. Earnings from coffee rose by $46.06 million, or 33.1 percent, from $139.05 million in October 2024 to $185.1 million in October 2025. The increase was driven by a sharp rise in export volumes, which grew by 37.7 percent to 680,000 60-kilogramme bags from 500,000 bags a year earlier, supported by higher production in the Central and Eastern regions.

However, the report notes that coffee export earnings declined on a month-on-month basis due to a fall in export volumes between September and October 2025, which outweighed a marginal increase in global coffee prices. Italy and Germany were the leading destinations for Uganda’s coffee exports during the month.

On a monthly basis, total export earnings rose by 55.9 percent from $959.89 million in September 2025 to $1.5 billion in October, mainly on account of increased receipts from gold, cocoa beans, crude oil products and tobacco.

Despite the strong performance, the Finance ministry cautioned that Uganda’s export base remains highly concentrated. Gold and coffee accounted for 76.8 percent of total exports in October 2025, highlighting the continued vulnerability of the economy to commodity price fluctuations and the need to diversify the export basket.

In terms of destination markets, the Middle East remained Uganda’s largest export destination, absorbing 49.1 percent of total exports. The United Arab Emirates dominated the region, accounting for 98.8 percent of exports to the Middle East. Other key destinations included Asia, which took 19.8 percent of exports, the East African Community at 17.5 percent, and the European Union at 8.8 percent.

The surge in exports significantly improved Uganda’s trade balance. The merchandise trade deficit narrowed by 70.4 percent year-on-year, shrinking from $251.56 million in October 2024 to $74.46 million in October 2025. This was largely due to a $726.84 million increase in exports, which more than offset a $549.74 million rise in imports.

On a month-on-month basis, the trade deficit contracted even more sharply, narrowing by 85.1 percent between September and October 2025. The improvement was driven by a $536.56 million jump in export earnings, compared to a $110.72 million increase in the import bill.

Economists say the data points to a strengthening external sector position, but warn that sustaining the gains will depend on boosting value addition and broadening the range of export products beyond traditional commodities.