Uganda’s Sees Surge in Exports; Italy Major Market for Uganda’s Coffee

Uganda is witnessing a surge in exports, leading to an improvement in the country’s balance of payment position. 

According to the Performance of the Economy Report released by the Ministry of Finance, in December 2023, Uganda exported merchandise worth USD 616.36 million. 

“This represented a 0.2% increase in comparison to USD 615.05 million exported in November 2023,” the report released on Thursday morning reads in part.

“This increase was majorly attributed to higher export earnings from simsim, tobacco and cotton registered during the month.”

In comparison to the same month the previous year, merchandise exports grew by 65.8% from USD 371.81 million in December 2022 to USD 616.36 million in December 2023. 

This was attributed to increased export earnings from gold, cotton, oil re-exports, tobacco among others.

Coffee exports during the month of January 2024 amounted to USD 65.94 million, a 6.7% decrease from 70.68 million registered in November 2023. 

This decrease, officials said, was partly due to delayed harvests and drying of newly harvested coffee caused by heavy rains.

However, when compared to the same month the previous year, coffee exports grew by 10.8% from USD 59.54 million in December 2022, to USD 65.94 million in December 2023. This was partly attributed to the increase in coffee prices on the global scene.

Observers say as the shock of the COVID-19 pandemic recedes, Uganda is returning to its pre-pandemic path to growth, with economic recovery boosted by the strong performance of the services and industrial sectors, buoyant private consumption, and an uptick in private investment.

Regional Trade 

A recent World Bank report noted that harnessing regional trade was a key and sustainable way for Uganda to deepen growth and achieve the ambitions of Vision 2040 to transform Ugandan society from a peasant farming economy to a modern and prosperous country.

“Policymakers must now focus on implementing policies designed to maximise the potential of regional trade,” the report released in December 2022 observed.

Experts encouraged Ugandan officials to think strategically and work to boost trade beyond the East African Community by increasing agricultural exports, diversifying into a wider range of manufactured goods, and fostering the growth of service exports including tourism, education, transport and logistics, and professional services.

The latest figures from the Finance Ministry also indicate a narrowing merchandise trade deficit.  

In December 2023, Uganda’s trade deficit with the rest of the world narrowed both on a monthly and annual basis. 

Between November and December 2023, the merchandise trade deficit narrowed by 9.9% from USD 299.65 million to USD 269.87 million on account of both a reduction in the import bill and an increase in export receipts.

Year-on-year comparison shows that the merchandise trade deficit declined by 10.9% from USD 302.77 million in December 2022 to USD 269.87 million in December 2023. This was on account of an increase in the export receipts which more than offset the increase in the import bill.

During the month of December 2023, Italy remained the major market for Uganda’s coffee exports accounting for 45% of the total coffee exports compared to 27.68 % recorded the previous month. This was followed by India, Germany, Morocco and Spain at 12.05%, 11.47%, 6.12% and 5.96% respectively.