By Tukundane Yonna
Uganda’s earnings from exports are far less than what it spends on imports resulting in a large trade imbalance vis-à-vis our trading partners. The revelation came out during the reading of the 2016/17 budget at Serena yesterday.
In the 12 months to March 2016, Uganda’s imports were worth US$ 5,647 million; compared to export receipts of just US$ 2,669 million, less than 50% of our import bill.
“A combination of factors including the strong US Dollar, the stagnation in export receipts, and speculative tendencies in the run up to the 2016 General Elections led to rapid weakening of the Uganda Shilling,” said Hon. Matia Kasaija
The Uganda Shilling lost 39% of its value vis-à-vis the US Dollar between September 2014 and September 2015. However, prudent fiscal and monetary policy as well as the successful completion of the General Elections has now restored confidence in the economy, with the Shilling recovering its strength to Shs. 3,326 per US Dollar by April 2016, a 10% improvement compared to the position in September 2015.
Uganda’s foreign exchange reserves remain adequate, estimated at US$ 2,925 billion representing 4.4 months of future imports of goods and services in April 2016. The target recommended in the East African Community is 4.5 months of imports.