KAMPALA: Uganda’s trade performance in June 2024 highlighted notable shifts in both exports and imports, driven by fluctuations in global commodity prices, regional trade dynamics, and sector-specific trends. Despite a decline in overall export earnings, key sectors like coffee continued to show resilience, while the import landscape saw a drop in non-oil goods. This report delves into the details of these developments, examining the performance of major export destinations and the origin of imports.
Merchandise Exports: A Mixed Picture
In June 2024, Uganda’s export earnings dropped sharply, totaling USD 718.60 million—a 23.6% decrease from USD 940.93 million in May 2024. This significant decline was primarily attributed to reduced earnings from mineral products, which are a key component of Uganda’s export portfolio. The latest Ministry of Finance macroeconomic policy report attributes this drop to weakening global demand and price fluctuations in the mineral sector.
However, when mineral products are excluded from the calculation, Uganda’s exports actually increased by 5.1%, rising from USD 446.85 million in May to USD 469.72 million in June 2024. This growth was primarily fueled by the coffee sector, with export earnings from coffee surging by 27.5% to USD 162.36 million, up from USD 127.30 million in the previous month. The increase in coffee earnings was driven by higher export volumes and rising international prices, resulting from lower global supply due to poor harvests in major coffee-producing countries like Vietnam and Indonesia. Uganda’s robust Robusta coffee production, particularly from the Greater Masaka and Southwestern regions, contributed to this upward trend.
Major Export Destinations: Regional and Global Shifts
Italy remained Uganda’s largest coffee export destination, accounting for 41.96% of total coffee exports in June 2024. Other important markets included Germany (10.55%), India (7.41%), Sudan (6.87%), and Spain (5.40%). These figures highlight the continued importance of European and Asian markets for Uganda’s agricultural exports, particularly in coffee.
When considering overall export destinations, the East African Community (EAC) emerged as the largest market for Uganda’s goods, accounting for 32.5% of total exports. Within the EAC, Kenya, the Democratic Republic of Congo (DRC), and South Sudan were the leading recipients, capturing 30.0%, 28.1%, and 21.8% of Uganda’s exports to the region, respectively. This strong regional performance underscores the importance of intra-African trade to Uganda’s economy.
Beyond the EAC, the Middle East, the European Union (EU), and Asia accounted for 24.5%, 18.2%, and 18.0% of Uganda’s total exports, respectively. Notably, the Middle East saw a marked increase in its share compared to June 2023, when it accounted for only 13.9% of Uganda’s exports. Conversely, Asia, which was previously Uganda’s largest export destination in June 2023 (at 33.2%), saw its share decline to 18.0% in June 2024.
Merchandise Imports: A Decline in Non-Oil Goods
The value of Uganda’s merchandise imports decreased by 6.5% in June 2024, falling from USD 1,033.50 million in May to USD 966.53 million. This decline was largely due to reduced volumes of non-oil imports, particularly vegetable products, animal products, beverages, fats and oils, and mineral products (excluding petroleum). The drop in non-oil imports suggests a contraction in domestic demand for agricultural and consumer goods, potentially reflecting broader economic constraints.
Despite this monthly decline, Uganda’s import bill for June 2024 was still 7.6% higher than in June 2023, when imports totaled USD 898.28 million. This year-on-year increase was driven by rising import volumes for petroleum products, chemicals, and mineral products, which continue to be critical to the country’s industrial and energy sectors.
Major Sources of Imports: Asia Leads, EAC and Middle East Follow
Asia remained the dominant source of Uganda’s imports, accounting for 34.6% of total imports in June 2024. Within Asia, China and India were the major suppliers, contributing 46.0% and 27.5% of Uganda’s imports from the region, respectively. These figures underline the strong trade ties between Uganda and Asia, particularly in manufacturing and industrial goods.
The East African Community (EAC) was the second-largest source of imports, contributing 19.5% of Uganda’s total imports. Within the EAC, Tanzania and Kenya were the leading suppliers, accounting for 54.1% and 42.1% of imports from the region, respectively. The Middle East (16.8%) and the Rest of Africa (17.2%) were also significant contributors to Uganda’s import portfolio.
In comparison to June 2023, Asia’s share of Uganda’s imports declined slightly from 36.9% to 34.6%, while the EAC’s share dropped more significantly from 26.9% to 19.5%. Conversely, the Middle East and the Rest of Africa saw their shares increase, reflecting a shift in Uganda’s import sourcing patterns as the country diversifies its trade partnerships.
Conclusion: Shifting Trade Dynamics
Uganda’s trade performance in June 2024 presents a complex picture of shifting trends in both exports and imports. While the overall export earnings declined sharply due to a drop in mineral product exports, sectors like coffee showed resilience, benefiting from higher international prices and increased production. The growth in export receipts from key agricultural products points to the ongoing importance of this sector to Uganda’s economy, even as global market conditions fluctuate.
On the import side, the decline in non-oil imports suggests a potential slowdown in domestic consumption of agricultural and consumer goods. However, the year-on-year increase in petroleum and industrial goods imports highlights the country’s continued reliance on energy and manufacturing inputs. As Uganda navigates these shifting trade dynamics, the focus on regional trade within the EAC and growing ties with the Middle East and Asia will be key to sustaining its economic growth trajectory.
