By Moses Mulondo
Uganda’s export earnings have significantly increased to $348.8m (about sh1.3 trillion) in October from $326.7m (about sh1.2 trillion) for the month of September.
This is according to the latest monthly performance of the economy report released by the finance ministry.
The Government has attributed the rise in export earnings to an increase in the export receipts of beans, fish, cocoa beans, and crude vegetable oil products such as sunflower.
Monthly earnings from fish exports increased from $10.3m in September 2022 to $14.6m in October 2022.
Earnings from vegetable oil products increased from $7.7m in September to $10.8m in October, and earnings from beans increased from $5.1m in September to $9.9m in October, while earnings from cocoa increased from $2.9m in September to $7.09m in October.
With gold exports no longer on the list of Uganda’s exports, coffee remains the country’s leading foreign exchange earner, followed by fish exports.
Several factors, including new government taxes on gold and the blacklisting by the US of the country’s only gold refinery over illicit gold transactions from the DR Congo, greatly reduced the volumes of gold exported from Uganda.
The monthly earnings from coffee exports, according to the report, declined from $71.2m realised in September to $67.1m in October.
Before the blacklisting of Uganda’s gold refinery and the Government imposing taxes on gold, the mineral had become Uganda’s leading foreign exchange earner, fetching an average of $175m every month.
The performance of the economy report indicates that Uganda’s inflation, which had slightly reduced from 10.7% to 10.6%, remains one of the highest in the region due to high commodity prices, especially food and fuel.
Within the East African Community region, Rwanda has the highest inflation rate, followed by Uganda. Inflation continued on an upward trend for Rwanda, increasing to 33.8% in November from 31.0% the previous month, mainly driven by a surge in the prices of food and non-alcoholic beverages.
On the other hand, Kenya’s inflation declined slightly to 9.5% in November from 9.6% in October as fuel and food prices eased.
Tanzania’s annual inflation remained the lowest and unchanged at 4.9% in November.
The state minister of trade, David Bahati, said Uganda has registered tremendous progress in improving earnings from exports.
“Exports have greatly improved from only $253m (sh910.8b) in 1992 to $6.6b (sh23.7trillion) in 2018/2019,” Bahati said.
The minister said through import substitution and various efforts to increase exports, Uganda would continues to improve its balance of trade.
Former Uganda’s ambassador to the UK, Julius Peter Moto, an economist by profession, suggested that Uganda invests more in productive sectors in the budget to increase the volume of exports.
“Agriculture needs to be given top priority. Farmers need to be helped with modern farming methods through extension services, certified inputs, irrigation, and mechanisation for high production levels. Value addition should also be budgeted for. We need to increase investments in the manufacturing sector. Intensified efforts and initiatives to promote our exports will increase our revenue base and create more jobs,” Ambassador Moto said.
The report also indicates that Uganda has continued to enjoy a trade surplus with the East African Community (EAC) countries, which means Uganda exports more commodities from the EAC countries than it imports from them.
In October, 2022 Uganda’s merchandise trade with the EAC resulted in a surplus of $114.54m (about sh430.5b), an increase from a surplus of $71.05m recorded in 2021.
Over the same period, exports to the EAC increased by 11.8%, whereas imports decreased by 22.5%.
There was an increase in export receipts from Rwanda, from $0.20m in October 2021 to $11.66m in October 2022. This followed the reopening of the Uganda-Rwanda border at the start of 2022.
Within the EAC bloc, Kenya remains Uganda’s leading trading partner. However, Uganda recorded a trade surplus with all EAC partner states except Kenya.
According to the report, Uganda’s trade surplus with EAC countries has more than tripled in recent months, rising from $40.5m in May, 2022 to $94.9m in June 2022 and eventually reaching $130.4m in August 2022.