In December 2023, Uganda marked a trade surplus of $22.30 million with other East African Community (EAC) Partner States, a significant shift from the previous month’s deficit of $22.67 million.
The Ministry of Finance’s January 2024 report revealed an improved perception of doing business in Uganda. The Business Tendency Index rose to 60.15, indicating optimism among the business community compared to the previous month’s 59.58.
Across various sectors such as construction, manufacturing, wholesale trade, agriculture, and other services, business sentiment remained positive. Although the agricultural sector showed slightly less optimism about the business situation in the next three months.
Uganda’s trade deficit with the rest of the world narrowed by 9.9% to $269.87 million in December 2023 due to reduced import bills and increased export earnings, particularly from cotton, simsim, and tobacco.
Domestic revenue collections in January 2024 fell short of the target at sh2,225.16 billion, mainly due to lower collections of Value Added Tax (VAT), Excise duty, and taxes on international trade. However, lower-than-planned government expenditure contributed to a deficit lower than expected.
In January 2024, annual headline inflation varied across EAC Partner States, with Uganda’s inflation rate remaining lowest at 2.8%. All currencies within the EAC region depreciated against the US Dollar, with Kenya experiencing the highest depreciation rate at 3.6%.
The positive trade balance with EAC partners and improved business sentiment suggest a favorable economic outlook for Uganda, despite some challenges in revenue collection and inflation fluctuations within the region.
