Uganda's export performance took a hit in September 2024, recording a significant Shs410 billion decline in the value of goods exported to the international market.
This revelation is part of the Performance of the Economy Monthly Report, October 2024, released by the Ministry of Finance, Planning, and Economic Development.
The report also highlights that Uganda imported merchandise worth Shs3.859 trillion (USD 1.051 billion) during the same month, marking a 1.7% reduction compared to the Shs3.927 trillion (USD 1.070 billion) recorded in August 2024.
"This was mainly attributed to lower volumes of both government project imports and formal private sector imports, particularly mineral products (excluding petroleum products), vegetable products, animal products, beverages, fats & oil, wood & wood products, among others," the report noted.
The value of Uganda's exports in September 2024 fell sharply compared to previous months, signaling challenges in global market dynamics and domestic production.
While the Ministry did not explicitly attribute the export decline to specific factors, global economic slowdowns, currency fluctuations, and trade policy shifts could be influencing these numbers.
On the import side, the report details a decline in merchandise import volumes, especially for key sectors such as mineral products, vegetable and animal products, and industrial goods.
This trend, while reducing foreign exchange expenditure, also reflects possible constraints in domestic demand or shifts in supply chain strategies.
In a contrasting trend, the report notes a 14% year-on-year growth in the import bill from September 2023 to September 2024.
The increase, which saw imports rise from Shs3.386 trillion (USD 922.73 million) to Shs3.859 trillion (USD 1.051 billion), was attributed to higher import volumes for items such as mineral products, chemicals, vegetable products, and plastics.
The East African Community (EAC) remains Uganda's leading source of imports, accounting for 25.1% of the total.
Within the EAC, Tanzania contributed the largest share at 65.2%, with Kenya following at 32.1%. Key imports from Tanzania included gold and rice, highlighting the deepening trade relationship between the two nations.
The reduction in export value poses a challenge for Uganda's balance of trade and foreign exchange earnings. Economists have raised concerns that sustained declines in export revenue could strain the country's foreign reserves and impact funding for development projects.
To address these challenges, experts suggest that Uganda should diversify its export base, enhance value addition for agricultural products, and improve competitiveness in international markets.
Boosting intra-Africa trade under frameworks such as the African Continental Free Trade Area (AfCFTA) could also provide opportunities for growth.
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Meanwhile, the decline in imports, particularly in key sectors, raises questions about domestic economic activity. While lower imports may ease pressure on foreign exchange, they could signal reduced investment in industrial inputs, potentially affecting production and employment in the short term.
The Shs410 billion drop in exports serves as a wake-up call for Uganda to reevaluate its trade strategies and strengthen its position in the global market.
Coupled with fluctuations in import volumes, these trends underscore the need for sustainable trade policies to bolster economic resilience in an increasingly volatile global environment.
