Uganda’s merchandise trade deficit narrowed by 39.3 per cent in May 2018 to US $131.0 million from US $215.8 million recorded in April 2018, the latest Bank of Uganda (BoU) report says.
According to the report, the reduction in the trade followed a combination of the declining import bill and increased export proceeds during that month.
However, compared to May 2017, the merchandise trade deficit widened by 2.3 per cent in May 2018 to US $131.0 million from US $128.1 million.
The merchandise exports earnings
The analysis shows that export earnings increased both on an annual basis and on a monthly basis. The total value of exports grew by 21.5 percent, from US $264.61 million in April to US $ 321.58 million in May 2018, largely due to an increase in the export receipts of maize, beans, gold, base metals and coffee.
The increase in the export receipts of coffee, gold, beans and maize is mainly attributed to the increase in their respective volumes.
Compared to May of last year, export earnings increased by US $11.8 million (3.8 per cent) in May 2018 to US$ 321.58 million from US $309.7 million. BOU attributes the performance to growth in the earnings of gold, beans, maize, fish and its products.
However, coffee earnings declined by 28.3 per cent following a decrease in both the volume and international prices. Coffee volumes decreased by 21.9 per cent whereas the prices fell by 8.1 per cent.
The decrease in coffee volumes is explained by an end of main season in the central and eastern region.
Cumulatively, from July 2017 to May 2018, the value and volume of coffee exports increased by 4.1 per cent and 10.1 per cent.
Destination of Exports during the month of May
The East African Community (EAC) remained the main destination for Uganda’s exports, followed by the Rest of Africa, and the Middle East. Exports to the EAC region increased by 13 percent from US $133.97 million in May 2017 to US $151.4 million in May 2018.
“Exports to all EAC Partner States increased save for Burundi which registered a decline of 9.5 per cent. Rwanda and Tanzania recorded the largest increases of 66.1 per cent and 47.8 per cent respectively. Table 6 shows the destination of exports,” the BOU report says.
Merchandise worth US $452.5 million was imported during the month of May, registering a decline of 5.8 per cent from the previous month. This decline was mainly driven by a significant decline in government imports (80.7 per cent) which more than offset the 2.6 per cent increment in formal private sector imports.
Compared to May of last year, merchandise imports registered an increase of 3.4 per cent in May 2018. The increase was primarily driven by an increase in private sector oil imports that upped 12.6 per cent.
Origin of imports during the month of May
The biggest share of merchandise was imported from Asia (39 per cent), followed by Middle East (23 per cent) and EAC (16 per cent). India, China and Japan contributed 79 per cent of the total imports from Asia, while 87.2 per cent of the imports from EAC was sourced from Kenya and Tanzania.