Goods trade deficit narrows in December as imports fall for third straight month

The Uganda goods trade deficit with its international partners contracted for the third straight month in December on a decline in goods imports, according to figures from the Bank of Uganda.

The deficit was $222.9 million (Shs819bn), down 16.6% from a year ago. In November the goods trade deficit fell 20.8% while it was down 22.4% in October.

Goods exports rose 8.0% year on year in December to $326.8m, while merchandise imports fell 3.5% to $549.7m. The drop in goods imports was the third in as many months.

The growth in merchandise exports was driven by a 56.6% year on year rise in exports to the United Arab Emirates, most likely the result of the 61.5% increase in gold exports to $99m. Formal exports rose 12.8% to $283.7m, driven by gold shipments, although coffee exports fell 1.7% to $31.9m. Informal cross-border exports were down 15.7% to $43m, largely due to a decline in industrial products.

On the import side, formal private sector imports increased by 9.8% to $526.1m while government imports fell 77.7% to $19.1m, driven by a decline in project imports. Non-oil imports, part of formal private sector imports, were up 12.6%, largely due to a rise in mineral products (excluding petroleum products) and machinery equipments, vehicles, and accessories. Oil imports were down 2.3%.

The fall in merchandise imports followed a 49% decline in imports from Saudi Arabia to $28.9m. Imports from South Africa fell 33.5% to $22.2m, while inbound shipments from Tanzania were down 22.2% to $38.5m. On the flip side, imports from China rose by $17.3m to $109.8m. Imports from India were valued at $52.7m, rising 19.2% year on year.