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Middle East Overtakes EAC As Uganda’s Major Export Destination

Coffee is Uganda’s major export item

The Middle East is now Uganda’s major export destination after overtaking the East African Community (EAC), the September 2020 Performance of the Economy Report released by Ministry of Finance has revealed.

“Uganda’s major export destination in August 2020 was the middle East as opposed to it being the East African Community (EAC) a year ago. The Middle East accounted for 54.1% of all exports out of Uganda in August 2020, almost a double increase from the 27.8% the region accounted for in August 2019,” the report obtained by Business Focus reads in part.

It adds that the value of exports to the Middle East more than doubled between August 2019 and August 2020 while the value of exports to all other trading regions declined in the same period.

On a country specific level, 53.6% of Uganda’s exports were destined to one country, the United Arab Emirates in August 2020, the report says.

It adds that the share of informal cross border trade (ICBT) shrunk from 13.0% in August 2019 to 0.3% in August 2020, owing to the effect of COVID-19 pandemic on regional trade as there has been imposition of tight border restrictions to curtail the spread of the virus.

Imports Increase

The report reveals that the value of imports continued to increase both on an annual and monthly basis during August 2020.

“Month on month, imports increased by 14.7% from US$ 605.02 million in July 2020 to US$ 693.89 million in August 2020. Similarly, there was a 34.0% increase on an annual basis from the US$ 517.93 million recorded in August 2019,” the report says.

The increase in both private and Government imports was mainly due to the increased level of economic activity in the domestic economy following the continued easing of the containment measures that had been put in place to curb the spread of COVID-19, the report says.

It adds that demand for consumption goods as well as inputs by manufacturers has led to increased importation of chemicals and related products; plastics, rubbers and related products; textile and textile products; base metal and their products; mineral products; vegetable products, animal products, beverages, fats and oil; and prepared foodstuff, beverages and tobacco amongst others.

“Government imports, especially project inputs, increased during the month as some of the major Government projects increased operations following the easing of the containment measures,” the report says. 

It reveals that Asia remained Uganda’s main source of imports though its share reduced from 42.5% a year ago to 34.1% in August 2020. The EAC and the Rest of Africa were second and third, with shares of 24.0% and 18.5% respectively. 

On a country specific level, Uganda gets most of her imports from China which accounted for 13.7% of the total import bill in August 2020.

This was followed by Kenya, Tanzania and India that respectively accounted for 12.7%, 9.8% and 9.0%.

Other countries that contributed significantly to the total import bill included Zambia, Netherlands and Japan (6.0%, 3.6% and 3.5% respectively).

“Just like the previous month, Uganda traded at a deficit with all regions except the Middle East in August 2020. However, the merchandise trade surplus with the Middle East declined by 6.5%. The region with which Uganda traded at the highest deficit was Asia at US$ 223.33 million, a growth of 19.3% when compared with the previous month,” the report says.

It adds: “For the fourth month in a row, Uganda traded at a deficit with the rest of the East African Community. This is partly attributed to the restriction of movement across borders that has greatly affected informal cross border trade.”

Taddewo William Senyonyi
William is a seasoned business and finance journalist. He is also an agripreneur and a coffee enthusiast.

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