Uganda’s imports surge 33% as trade gap widens

KAMPALA. Uganda’s merchandise imports surged by 33.2 per cent to $1.88 billion in June, widening the country’s trade gap despite an 11 per cent increase in export earnings during the month.

The sharp increase in imports, equivalent to about $469 million compared with June 2025, was entirely driven by the private sector, according to the Ministry of Finance’s July 2026 Performance of the Economy Report.

Formal private-sector imports increased by 34.3 per cent from $1.38 billion in June 2025 to $1.85 billion in June this year.

Government imports, by contrast, fell by 49.3 per cent from $22.13 million to $11.21 million over the same period.

The surge in private-sector imports was driven by increased purchases of mineral products, excluding petroleum, petroleum products, chemicals and related products, plastics and rubber, as well as machinery, equipment, vehicles and accessories.

Petroleum imports alone increased by 66 per cent, rising from $184.38 million in June 2025 to $306.15 million in June 2026.

Non-oil imports also rose sharply, increasing by 29.4 per cent from $1.20 billion to $1.55 billion.

The increase in imports came despite growth in Uganda’s export earnings, which rose from $1.16 billion in June 2025 to $1.28 billion in June this year.

The figures leave Uganda with a merchandise trade deficit of about $598 million for June, as imports significantly outpaced exports.

The widening gap highlights the continued pressure on Uganda’s external position, even as stronger private-sector demand pushes up imports of fuel, machinery, vehicles and industrial inputs.

The import surge could, however, also point to increased business activity, particularly where imported machinery, equipment and industrial inputs are being used for production and investment.

On the export side, the increase in earnings was supported by higher receipts from gold, cotton, electricity, tobacco, maize and flowers.

However, Uganda’s traditional coffee export sector suffered a major setback.

Coffee export earnings fell by 36.3 per cent, from $289.60 million in June 2025 to $184.43 million in June this year.

The decline was caused by a combination of lower export volumes and falling international prices.

Uganda exported 773,308 bags of coffee weighing 60 kilogrammes each in June, down from 1.01 million bags during the same month last year.

The average coffee price also fell from $4.76 per kilogramme to $3.97 over the period.

The Ministry attributed the fall in international coffee prices largely to increased supply from major producing countries, including Brazil and Vietnam.

Italy remained Uganda’s biggest market for coffee, taking 31.3 per cent of total coffee exports, followed by Sudan at 12.9 per cent, Germany at 7.9 per cent, India at 6.5 per cent and Morocco at five per cent.

Beyond coffee, the report raises another concern about Uganda’s export vulnerability: concentration in a small number of markets.

The Middle East accounted for 49.8 per cent of Uganda’s total merchandise exports in June, with 98.9 per cent of the region’s imports from Uganda going to the United Arab Emirates.

The Ministry warned that the heavy dependence on the UAE exposes Uganda to risks should there be a negative economic or policy shock in that market.

The East African Community was Uganda’s second-largest export destination, accounting for 24.9 per cent of exports, followed by the European Union at 11.2 per cent and Asia at 8.5 per cent.

The four regional blocs together accounted for 94.4 per cent of Uganda’s exports during the month.

The latest figures therefore present a mixed picture for Uganda’s external trade.

While export earnings are growing, the pace remains significantly below the growth in imports. At the same time, the sharp fall in coffee earnings and heavy dependence on the UAE market expose vulnerabilities in the country’s export base.

For policymakers and exporters, the figures reinforce the need to expand value addition, diversify export products and find new markets while reducing excessive dependence on a handful of destinations.

The strong increase in private-sector imports, meanwhile, will be closely watched to determine whether it translates into higher domestic production, investment and export capacity or further widens Uganda’s trade imbalance.