Imports and exports both fall as trade deficit narrows in October

Good imports fell at the fastest pace in 34 months in October, leading the decline in the trade gap

The Uganda goods trade deficit narrowed for the second time in three months in October as both exports and imports declined, according to data from the Bank of Uganda.

The deficit in goods shrank by 22.2% from a year earlier to $224.2 million (Shs821.2bn), mainly driven by a fall in goods imports.

Merchandise imports declined at the fastest pace in 34 months in October, falling to $535.8m from $613.2m a year ago, a reduction of 12.6%. The decline in imports was largely a result of lower government project imports; these were $30.4m compared to $87.4m a year ago. Formal private sector imports also fell by 4% to $500.4m on declines in machinery equipments, vehicles, and accessories and petroleum products.

Goods imports from Asia fell to $237.7m in October from $251.4m the same month last year and comprised 44.4% of total imports. Imports from China made up 16.1% of all goods imports and declined 10.5% year on year to $86.1m while shipments from India fell 8% to $67m, which was 12.5% of total inbound shipments.

The value of imports from the Common Market for Eastern and Southern Africa was $73.3m, comprising 13.7% of the total, a year on year decline of 20.7%. Of these, imports from Kenya came in at $51.9m and were down 24.9% year on year. The Middle East accounted for 15.4% of total imports to Uganda, led by the United Arab Emirates with inbound goods shipments worth $47.2m from $64.4m in October 2018.

Goods exports fell the most in nine months, declining 4.2% year on year to $311.6m, mainly reflecting lower receipts for non-coffee formal exports. Gold exports fell 6.4% to $73.8m while oil re-exports declined 24.4% to $10.5m. Coffee exports, on the other hand, rose 4.8% to $36.9m while informal cross border trade exports increased by 29.7% to $43.7m.

Goods shipments to the United Arab Emirates fell to $76.4m in October from $82.7m a year ago, which is most likely a result of the decline in gold exports. Formal exports to Kenya rose 45.2% to $50.2m while informal exports to the Democratic Republic of Congo increased by 34.8m to $28m. Formal exports to Rwanda fell to $0.7m from $19.4m in October 2018.