KAMPALA: In a significant break from past trends, gold has emerged as Uganda’s leading export, accounting for approximately 75.7 percent of all export earnings. This was highlighted by Matia Kasaija, Minister of Finance, Planning and Economic Development, in his Budget Speech for the Financial Year 2024/2025. Themed “Full Monetisation of Uganda’s Economy through Commercial Agriculture, Industrialization, Expanding and Broadening Services, Digital Transformation, and Market Access,” Kasaija detailed the robust performance of Uganda’s exports and the positive impact of the government’s Export Promotion Strategy.
“Gold has trumped all other exports to become the leading foreign exchange earner for Uganda,” Kasaija announced, noting that this shift reflects the country’s strategic focus on enhancing value addition and diversifying export commodities. Following gold, other significant contributors to Uganda’s export earnings include coffee (21.9 percent), oil reexports (21.8 percent), sim-sim (20.2 percent), tobacco (10.3 percent), cotton (6.9 percent), and light manufactured products (4.9 percent).
The minister reported a remarkable increase in Uganda’s exports, which grew by USD 2.534 billion to USD 7.471 billion by April 2024, a 34 percent rise compared to the previous year. He attributed this growth primarily to increased exports of gold and other key products. “The major destinations of our exports are the East African Community (EAC) countries, COMESA, the Middle East, and Asia,” Kasaija noted, emphasizing the importance of regional and international markets.
Efforts to boost value addition have also paid off, with significant contributions from manufactured products, he said. In 2023, cement exports reached USD 91.1 million, sugar USD 75.8 million, plastic products USD 62.6 million, soap USD 33.9 million, and beer USD 25.8 million. “Our investments in targeted value addition initiatives and enabling trade policies have strengthened export performance,” Kasaija stated.
Despite the increase in exports, Uganda’s imports also rose, amounting to USD 12.9 billion by the end of the financial year, up from USD 10.3 billion the previous year. This rise was mainly driven by a 23 percent increase in private sector imports, largely to support the development of Uganda’s burgeoning oil and gas sector.
Kasaija highlighted the positive trends in Foreign Direct Investment (FDI), remittances, and tourism. FDI inflows amounted to USD 2.46 billion in FY2022/23, with an additional USD 1.27 billion attracted by December 2023/24. Remittances from Ugandans abroad increased to USD 1.43 billion in 2023, while tourism revenues rose to USD 1.28 billion in the same period.
Job creation remains a top priority for the Ugandan government. The number of workers subscribing to various pension schemes increased to over 3.14 million in FY2023/24, a 4.2 percent rise from the previous year. The Presidential Initiative on Jobs and Wealth Creation (Emyooga) alone created 378,640 new jobs in the past year. “Efforts to create formal jobs and improve livelihoods will be supported through project-funded interventions like the GROW and INVITE Projects,” Kasaija said.
Uganda’s fiscal performance has seen improvements, with the fiscal deficit reduced to 4.5 percent of GDP this financial year, down from 5.5 percent last year. However, the projected domestic revenue outturn for FY2023/24 fell short by over Shs 1.9 trillion against the target. The Uganda Revenue Authority is working to bridge this gap in the remaining days of the financial year. For FY2024/25, domestic revenue is projected to reach Shs 31.982 trillion, equivalent to 14.2 percent of GDP.
Overall, Uganda’s economic outlook appears promising, with robust growth in exports, increased investment, and strategic initiatives aimed at enhancing job creation and economic stability. The government’s commitment to fiscal consolidation and value addition continues to drive the country’s economic recovery and development.