Uganda’s gap between the value of imports and exports (current account deficit) has doubled in October 2018, due to a sharp increase in government and private sector imports.
The gap, which has persistently been increasing over time, rose by Shs2.5 trillion or about $732m to $1.74b for the year ending October 2018, compared to the same period in 2017.
Data from the Central Bank indicates that the growth was influenced by rise in chemicals, industrial equipment, fuel and motor vehicles imports from the 12 months under review. Uganda continues to be a net importer, which has subsequently led to a constant outflow of foreign exchange.
According to Bank of Uganda, the gap is projected to widen further largely on account of a pickup in imports by government and private sector partly due to planned development of the oil and gas sector and the associated rise in infrastructure investments.
However, the growth could be moderated by projected inflows expected in the 2018/19 financial year. The Bank of Uganda said that the trade deficit has also widened with imports growing by $829m compared to $138m for exports.
The trade deficit was expanded by $514 million to $2.1b during the same period.