Despite the slowdown in international trade due to Covid-19 pandemic, the Ministry of Finance, Planning and Economic Development has revealed that Uganda recorded a trade surplus with the European Union of $0.32 million (Shs118 million) and the Middle East $87.70 million (324 billion) in May 2020
The Ministry said in the performance of the economy report of July 2020 that export earnings increased by 40.4 per cent in May 2020 to $290.93 million (Shs1.07 trillion) from $207.15 million (Shs765 billion) in the previous month.
“This was the first time since January 2020 that exports were registering an increment, implying that the supply chain disruptions caused by the Covid-19 pandemic is starting to ease. However, in comparison with the same period last year, export earnings decreased from $349.61 million (Shs1.3 trillion) in May 2019 to $ 290.93 million (Shs1.07 trillion) in May 2020,” said the Ministry.
They added: “The Middle East was the leading destination for Uganda’s exports accounting for 44.4 per cent of all exports. It was followed by the EAC at 23.1 per cent and the European Union at 12.5 per cent.”
However, during the under review, the Ministry said there was a reduction in exports to all trade blocs save for the Middle East where exports increased to $128.9 million (Shs476 billion) in May 2020.
“Earnings from export commodities such as cotton, tea, tobacco, fish, oil re-exports, base metals & products recorded drops. Nonetheless, the value of some export commodities like coffee, gold, maize and beans increased during July compared to the same month last year.”
However, on the other hand, the Ministry of Finance says compared to May 2019, there was a decrease in the total value of Uganda’s exports as the out-break of Covid-19 negatively affected demand for our exports as well as disrupting export supply chains.
The Ministry explained that during this period the value of imports decreased on an annual basis, while it increased on a monthly basis in May 2020. The value of imports decreased by 27.1 per cent from $566.13 million (Shs2.1 trillion) in May 2019 to $412.73 million (Shs1.5 trillion) in May 2020.
The report shows that the government imports declined by 91.6 per cent following a drop in both project and non-project imports, whereas; private sector imports fell by 22.6 per cent as both oil and non-oil imports recorded reductions.
It says categories that registered the largest drops include: Petroleum products; machinery equipment, vehicles & accessories; base metals and their products; and miscellaneous manufactured articles. In comparison with April 2020, the import bill increased by 23.4 per cent from $334.36 million (Shs1.2 trillion) to $412.73 million (Shs1.5 trillion) in May 2020, on account of growth in non-oil private sector imports.
“Just like for the case of exports, May 2020 was the first month since January 2020 that there was an increase in imports into the country. In May 2020, the majority of the imports originated from the EAC region accounting for 36.1 per cent of total imports followed by Asia at 32.3 per cent. Majority of the imports from the EAC region originated from Kenya and Tanzania,” the Ministry of Finance said.