Uganda’s trade deficit hits four-month high in February

Uganda’s custom border station at Busia. Credit: Uganda Revenue Authority on Facebook.

Uganda’s merchandise trade deficit widened in February as imports of goods rose to their highest level in four months.

The deficit was $189.6m, the largest monthly gap between exports and imports of goods since October 2017, according to data from Bank of Uganda.

This follows an 8.4% monthly growth in goods imports to $474.6m, the fastest monthly growth since September 2017.

Goods exports, on the other hand, fell 13.4% from the previous month to $285m; you have to back to June 2013 for a faster monthly decline.

The monthly rise in imports was driven by a $42.3m growth in government imports to $51.8m. Private sectors imports however fell 1.3% to $422.8m following a 41.4% decline in estimated private sector imports.

Revenue from non-coffee formal exports fell to $189.2m, 18.7% lower than in January, driven by declines in the sales of gold and beans.

Compared to the same month last year, the merchandise trade deficit increased by 89.3% due to a 34.5% rise in imports. Exports also recorded a year on year growth of 12.7%.

Government imports increased by $47.8m compared to last February, while private sector imports increased by $73.9m due to increased spending on petroleum products, vegetable food products and beverages, and machinery, equipment, vehicles and accessories.

The annual growth in exports was driven by an increase in non-coffee formal exports and informal cross-border exports, especially industrial products.