Uganda’s Trade Deficit Widens by 50%

Uganda trade deficit with the rest of the world widened by 49.2 percent in Financial Year 2018/2019 as demand for imports continues to overhead the country’s exports.

According to the National Budget Framework Paper (NBFP) 2020/2021 presented by the Finance Minister, Matia Kasaija to Parliament in December, imports increased by USD$ 2.1bn from USD$ 7.5bn in 2017/2018 to USD$ 9.6bn in 2018/2019. The above increase represents 22.2 percent annual increase compared to 9.7 percent exports earnings increase from USD$ 5bn in 2017/2018 to USD$ 5.9bn in 2018/2019.

“Uganda recorded a higher trade deficit with the Rest of the world, as imports of goods grew faster than exports. In comparison with FY 2017/18, the value of imports increased by 22.2 percent to USD 9,604 million, while exports earnings improved by 9.7 percent to USD 5,898 million during FY 2018/19,” said part of the NBFP.

The above statistics means that trade deficit has been widened by USD 1,222 million (49.2percent) to USD 3,706 million in 2018/19 from USD 2,484 million registered in 2017/18.

At the regional level, Uganda’s exports to the sisterly neighboring Rwanda decreased by USD$ 89m from USD$ 253m in 2017/2018 to USD$ 167m in 2018/2019.

Noticeably, imports from Tanzania astronomically grew by 409 percent from USD$ 85m in 2017/2018 to USD$ 433m in 2018/2019.

Uganda continues to enjoy trade surplus with the EAC partner states at USD$ 11m in 2018/2019 though big decline from USD$ 932 in 2017/2018 representing 8,372 percent drop.

According to the Finance Ministry, increased imports from partners states like Tanzania was due to existence of non-tariff barriers and the decline of trade between Uganda and Rwanda is blamed on the “temporary” border closure.


Meanwhile the decline in agricultural exports such as beans and maize to the region, specifically to Kenya was due to increased domestic production of similar products is also responsible for the regional trade decline.

Government has embarked on measures to increase imports substitution (producing highly demanded goods and services from abroad, in the country) in the areas of furniture, textile, information and communication technology and others.

Several factories were also erected last year to mainly add value on agricultural products and other exports.

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