Uganda’s trade deficit increases to over Shs900 billion

Uganda’s merchandise trade deficit with the rest of the world increased significantly from USD 92.58 million (about Shs345b) in May 2024 to USD 247.93 million (Shs918 billion) in June 2024, the latest report shows.

 According to the Performance of the Economy Report for July 2024, this increase was due to a decline in the export receipts, which more than offset the decrease in the import bill during the month.

However, compared to the same month the previous year, the merchandise trade deficit narrowed by 2.9%, decreasing from USD 255.38 million in June 2023 to USD 247.93 million in June 2024.

“This was driven by a higher increase in export earnings, which outpaced the rise in the import bill over the period,” the report reads.

Export earnings in June 2024 amounted to USD 718.60 million, a 23.6% decrease from USD 940.93 million in May 2024. This decline was mainly attributed to lower export earnings from mineral products during the month.

However, excluding mineral products, exports increased by 13 5.1% from USD 446.85 in May 2024 to USD 469.72 million in June 2024, owing to higher coffee receipts. However, coffee export earnings grew by 27.5% to USD 162.36 million in June 2024, up from USD 127.30 million in May 2024.

This growth was driven by higher export volumes and an increase in international coffee prices. The increase in coffee export volumes was mainly on account of higher Robusta coffee yields from the Greater Masaka and South Western regions of Uganda.

“The rise in international coffee prices was driven by reduced supply of coffee from Vietnam and Indonesia which experienced shortage in local supply due to poor harvests,” the report adds.

Italy remained the largest market for Uganda’s coffee exports, accounting for 41.96% of the total coffee exports in June 2024. Other significant markets included Germany, India, Sudan and Spain accounting for 10.55%, 7.41%, 6.87% and 5.40% of the total coffee exports, respectively