Middle East overtakes EAC as Uganda’s top export destination

Middle East overtakes EAC as Uganda’s top export destination
Minister of Finance Matia Kasaija

The Middle East is overtaking the East African Community (EAC) as a top destination for Uganda’s exports. The exports to the Arab states earned USD 68 million (251 billion Shillings) in January 2019, against a total earning of USD 44 million (163 billion Shillings) from the EAC partner states.

The figures show that exports to the Middle East could have been propelled by only gold. United Arab Emirates (UAE) took the giant share of Kampala’s exports at USD 65 million (240 billion Shillings) out of the total USD 68 million (251 billion Shillings) the country earned from the Middle East, in January 2019.

Israel came a distant far, importing just USD 2.5 million (9 billion Shillings) worth of goods from Uganda. The rest of the countries in that region – Bahrain, Saudi Arabia, and Jordan – accounted for less than USD 1 million (3.6 billion Shillings) of imports from Uganda.

According to a Ministry of Finance report on the performance of the economy, both exports to the EAC and imports from the EAC dropped, by 7 per cent and 4 per cent respectively, compared to the previous month. This is explained by the fall in exports to Kenya since the start of the 2018/19 financial year which is partly attributed to a decline in the exports of maize and beans.

Kenyan farmers registered a bumper harvest towards the end of 2018, replacing imports from Uganda. As a result, Uganda’s earnings from Nairobi dipped from USD 35 million (129 billion Shillings) to USD 27 million (99 billion Shillings) in November, USD 15 million (55 billion) in December and rising slightly in January to USD 17.8 million (66 billion Shillings).

Last October, Uganda reported a trade surplus with Kenya for the first time in recent times. Falling exports could bleach this gain.

On a positive note, trade deficit – where money spent on imports is more than earned on exports – with the EAC reduced. “The narrowing of the deficit was mainly due to a lower deficit with Tanzania, resulting from a drop of imports (down 26 per cent) from Tanzania during the month,” the report said.

Kenya and Tanzania remained Uganda’s main trading partners with the country recording a trade deficit with Kenya and Tanzania and a surplus with the rest of the EAC partner states. Meanwhile, Asia, EAC and the Middle East were the main sources of imports in January. Asia contributed the biggest chunk of imports, 82 per cent of the merchandise was sourced from China, India and Japan.

Almost all imports (98 per cent) from the EAC come from Kenya and Tanzania.