Uganda’s export earnings have grown to Shs27.1 trillion, the State of the Economy Report rereleased by the Central Bank indicates. The growth is largely attributed to gold exports.
The country’s overall balance of payments (BoP), which records transactions with the rest of the world, has remained resilient. The BoP recorded a surplus of $278 million (Shs1 trillion) in the year to January 2024 relative to the previous year, largely due to improvements in the current account.
The current account deficit narrowed to $3.7 billion, largely due to higher export revenue and a stronger secondary income surplus.
“Excluding gold, exports increased by $433 million (Shs1.6 trillion) due to favourable weather conditions, improved trade relations, and relative improvements in the terms of trade as global commodity prices continue to recede,” the report indicates.
Though outpaced by export receipts, imports grew by 28.0 percent to US$10 billion (Shs39. trillion), owing to increased private sector imports for investment such as oil, gold, and machinery. Excluding gold, imports increased by 0.9 percent to $7.8 billion (Shs30 trillion).
With export growth outpacing import growth, the trade balance improved by 13.3 percent to US$3.1 billion (11.9 trillion) in the year to January 2024. The secondary income surplus also improved by $48.2 million (Shs183 billion) to $19 billion (Shs7.5 trillion), supported by increased receipts of personal transfers. However, other components of the current account deteriorated.
“Foreign direct investments remain robust at $2,888.6 million in the 12 months to January 2024. Other investment net inflows stood at $1,008.0 million in the year to January 2024, a slight decline from the previous year due to increased debt service payments and limited loan disbursements to the government,” the report shows.
The report states that the BoP outlook is highly dependent on the evolution of geopolitical tensions, their impact on the supply chain and commodity prices, and the extent to which global financial markets will remain tight. It is likely to accumulate a surplus of $300 million (Shs1.1 trillion) by June 2024, as exports are expected to increase relative to imports.
