Uganda’s trade balance posts 26 per cent improvement, says BoU

 

A registration agent assists Mr Godffrey Mutabazi, the UCC executive director during the launch of sim card registration. 

By Frederic Musisi

By MARTIN LUTHER OKETCH
 

 

In Summary

Uganda continues importing more than it exports, affecting the country’s trade balance position with rest of the world.

Kampala

Despite the worsening trade balances as a result of more imports than exports, Uganda’s current account position improved by 26 per cent in March 2013.

Current account means the difference between a nation’s total exports of goods, services and transfers, and its total imports over a given period of time. Current account balance calculations exclude transactions in financial assets and liabilities.

In the new state of economy report with reference to Balance of Payment (BOP), the Central Bank explained that the improvement in current account was supported by lower deficit on the services account arising from lower payments for business services and improved net current transfers mainly on account of higher workers remittances.

On the worsening trade balance (balance of trade), the Central Bank says it was due to lower export receipts mainly on account of lower coffee exports. In March 2012, Uganda export declined to $248.1million from $266 million recorded in February 2013, while the import bill for March stood at $371.5 million slightly down from $385 million

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The balance of trade (or trade balance) means the difference in value over a period of time of a country’s imports and exports of merchandise. In economic terms, a nation’s balance of trade is favourable when its exports exceed its imports.

In the recent past, Uganda has been recording a surplus on the capital and finance account. However, there has been decline in both accounts this time.

The executive director research at Bank of Uganda, Dr Adam Mugume, said the surplus on the capital and financial account decreased to $166 million from $305 million recorded in February 2013. “Decline was mainly due to reduced loan disbursements to general government. Net disbursements amounted to $24 million in March 2013 compared to $72 million received in the previous month,” he said.