TRADE BALANCE AND ECONOMIC PERFORMANCE

TRADE BALANCE


Uganda's economy improved rapidly during the 1990s and early 2000s, and the country has been acclaimed for its economic stability and high rates of growth. We are one of the few African countries praised by the World Bank, the International Monetary Fund, and the international financial community for its economic policies of government divestiture and privatization and currency reform. Uganda has been particularly successful in soliciting international support and loans. In 1997 we were selected as one of the few countries to receive debt relief for its successful implementation of stringent economic reform projects and has continued to qualify for significant debt relief since then. Because of this, Uganda has been able to focus on eradicating poverty and expanding resource exploitation, industries, and tourism.

Uganda is the 126th largest export economy in the world. In 2016, Uganda exported $6.12B and imported $11.7B, resulting in a negative trade balance of $5.55B.

 The top exports of Uganda are Gold ($679M), Coffee ($413M), Raw Tobacco ($93.4M), Unspecified ($93.4M) and Cocoa Beans ($89.1M), using the 1992 revision of the HS (Harmonized System) classification. Its top imports are Refined Petroleum ($698M), Packaged Medicaments ($288M), Telephones ($257M), Palm Oil ($201M) and Cars ($131M).

As of 2016 Uganda had a negative trade balance of $5.55B in net imports compared to the trade balance in 1995 where it was a negative $307M.

EXPORTS

In 2016 Uganda exported $6.12B, making it the 126th largest exporter in the world. During the last five years the exports of Uganda have increased at an annualized rate of 69.8B%, from $2.5B in 2011 to $6.12B in 2016. The most recent exports are led by Gold which represent 11.1% of the total exports of Uganda, followed by Coffee, which account for 6.76%.

Exports

Agriculture, forestry, and fishing

Agriculture accounts for a large share of Uganda's export earnings and its gross domestic product, as well as providing the main source of income for the vast majority of the adult population. Agricultural productions are largely based in the south, where there is more rainfall and fertile soil. Two important cash crops for export are coffee and cotton. Tea and horticultural products (including fresh-cut flowers) are also grown for export. Food crops include corn (maize), millet, beans, sorghum, cassava, sweet potatoes,plantains, peanuts (groundnuts), soybeans, and such vegetables as cabbages,greens, carrots, onions, tomatoes, and numerous peppers. 

Cassava (Manihot esculenta), which is also called manioc, in cultivation in Uganda. M. Brambilla/DeA Picture Library

Livestock include cattle, both indigenous varieties and those known as exotics (mainly Friesians), plus experimental crossbreeds,sheep, goats, pigs, chickens, ducks, and turkeys. There have been several projects to introduce rabbits. Cattle ranching has been encouraged in the western region of the country. Dairy farming is another expanding sector with Uganda producing pasteurized and "long-life" milk, butter, yogurt, and cheeses.  

Because lakes and rivers cover nearly 20 percent of Uganda, fishing holds considerable potential for the country. Foreign investment in fish processing centres begun in the late 1980s and fish products are now an important export. 

Fishermen at Lake Victoria

Resources and power

Uganda's reserves include copper, tungsten, cobalt,columbite-tantalite, gold, phosphate, iron ore, and limestone. Gold, cobalt,and columbite-tantalite are mined. Exploration for petroleum, which had long showed geological potential, particularly under Lakes Albert and Edward, proceeded slowly until 2006, when oil was struck. Significant quantities of petroleum were discovered in the Lake Albertine rift basin in 2008 and 2009.


IMPORTS

In 2016 Uganda imported $11.7B, making it the 127th largest importer in the world. During the last five years the imports of Uganda have increased at an annualized rate of 69.8B%, from $5.7B in 2011 to $11.7B in 2016. The most recent imports are led by Refined Petroleum which represent 5.99% of the total imports of Uganda, followed by Packaged Medicaments, which account for 2.48%.

Imports


ECONOMIC PERFORMANCE AND OUTLOOK 

Economic performance generally remained strong despite the recent slowdown in real GDP growth, which is projected to reach 5.9% in 2018,up from 4.8% in 2017 and 2.3% in 2016. The increase in economic growth in 2018 is expected to be driven mainly by public infrastructure investment; recovery in manufacturing and construction; and improvements in the services sector, particularly financial and banking, trade,transport, and information and communication technology services.


MACROECONOMIC EVOLUTION 

Uganda pursued a cautious expansionary fiscal policy stance to support key infrastructure projects in transport and energy, while keeping recurrent expenditure under control. The overall budget deficit was slightly high in 2016, improved in 2017, and is projected to increase in 2018 and 2019.The balance of payments deteriorated, mainly as the result of external economic headwinds, including low commodity prices due to slow growth in Europe and China and tightening global financial and monetary conditions. The macroeconomic policy stance remains focused on containing inflationary pressures, enhancing exchange rate stability, and stepping up domestic resource mobilization growth by 0.5 percentage point of GDP. The debt-to GDP ratio is increasing and is projected to reach 38.6% of GDP in 2016 and 45% by 2020 from 34.1% in 2014. However, the most recent International Monetary Fund and World Bank Group debt sustainability analysis in 2016 gives Uganda's risk of debt distress a low rating.


TAILWINDS

The main tailwinds for the 2018 economic outlook include increased agricultural production due to better weather conditions; higher foreign direct investment (FDI) flows following the recent issuance of oil exploration licenses; and the expected decision by the government to invest in oil infrastructure development in early 2018, given the projected increase in oil prices to an average of $55 a barrel in 2017-18 from $43 a barrel in 2016.

 

Sources:

Ministry of Finance, Planning and Economic Development

African Economic Outlook (AEO) 2018

African Development Bank Group

The Observatory of Economic Complexity

Encyclopedia Britannica