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Uganda’s Export Revenue Soars by 21.8% in Q1 FY 2024/25

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Uganda’s Export Revenue Soars by 21.8% in Q1 FY 2024/25
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Uganda’s export sector has experienced substantial growth in the first quarter of the 2024/25 financial year, with total earnings reaching Shs 8.389 trillion (USD 2.262 billion), a 21.8% increase compared to Shs 6.948 trillion (USD 1.857 billion) in the same period last year.

Ramathan Ggoobi, Permanent Secretary and Secretary to the Treasury in the Ministry of Finance, Planning, and Economic Development, emphasised this achievement during the release of the third-quarter expenditure updates.

“This growth is a testament to our deliberate efforts to diversify export products and enhance the competitiveness of Uganda’s goods on the international market,” Ggoobi stated.

The surge in export earnings was largely driven by coffee, Uganda’s top export commodity. Coffee exports increased significantly in both volume and international prices. Other key exports that contributed to the growth included mineral products, flowers, sesame (simsim), and tobacco, all of which performed better than the previous year.

The increase in export revenue has several positive implications for Uganda’s economy. First, it contributes to strengthening Uganda’s foreign exchange reserves, providing more stability to the shilling.

It also creates opportunities for job creation in the agricultural and manufacturing sectors. Additionally, the growth of exports boosts the overall trade balance, which is essential for sustaining long-term economic development.

However, Uganda’s import bill also increased, rising to Shs 11.829 trillion (USD 3.161 billion) in Q1 FY 2024/25, up from Shs 10.245 trillion (USD 2.746 billion) in Q1 FY 2023/24. This rise was driven primarily by higher imports of machinery, electronics, and industrial inputs.

Despite the increase in export revenue, the widening import bill led to a slight rise in the trade deficit by 1.2%, from Shs 3.290 trillion (USD 888.38 million) in Q1 FY 2023/24 to Shs 3.388 trillion (USD 898.66 million) in Q1 FY 2024/25.

“The widening trade deficit underscores the need to focus on import substitution industries to reduce reliance on foreign goods,” Ggoobi remarked.

Uganda also recorded impressive growth in Foreign Direct Investment (FDI), which surged by 25.4%, reaching Shs 2.974 trillion (USD 799.46 million) in Q1 FY 2024/25, compared to Shs 2.390 trillion (USD 637.58 million) in Q1 FY 2023/24.

“This increase in FDI reflects the growing confidence of investors in our economy and highlights Uganda’s potential as a regional investment hub,” Ggoobi added.

Experts say that with the rise in export earnings and FDI, Uganda’s economic prospects remain promising. The government is committed to enhancing export diversification, promoting local manufacturing, and building economic resilience, all of which are crucial for sustainable growth in the long term.

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