According to the latest performance of the economy (July 2025), Uganda’s external trade position weakened in June 2025 as merchandise exports declined month-on-month while imports continued to climb, widening the country’s trade deficit.
The latest trade statistics show that despite strong year-on-year export growth, the month-to-month movement points to persistent vulnerabilities in Uganda’s trade structure.
The value of merchandise exports fell by 3.6%, from $1.197 billion (sh4.4 trillion) in May 2025 to $1.154 billion (sh4.2 trillion) in June. This decline was largely driven by reduced earnings from gold, tea, tobacco, maize, cocoa beans, and sugar.
Exporters also faced fresh hurdles within the East African Community (EAC), where new tariff and non-tariff barriers, including import quotas, were introduced by some partner states. These affected goods, such as tiles, fish, dairy and meat products, onions, and potatoes, restrict Uganda’s access to its closest regional market.
Oscar Kamukama, Uganda Representative and Director on the East African Business Council (EABC) Board, warns that the region’s rising tide of tariffs and non-tariff barriers (NTBs) is undermining the very foundation of the East African Community (EAC).
He notes that while the EAC Common Market Protocol, in place since 2010, guarantees the free movement of goods, people, labour, services, and capital, the reality on the ground is different. “Instead of a borderless market, we are seeing new restrictions: visa fees, discriminatory taxes, excise duties, and rigid standards,” Kamukama says.
“For Uganda, a land-linked economy that depends on regional access, these barriers drive up costs and dilute the benefits of integration.”
Ugandan traders continue to grapple with a host of challenges across the bloc. In South Sudan, foreign vehicles attract steep charges disguised as security measures, while traders face corruption, multiple revenue points, extortion, and cargo theft. EAC citizens from Uganda, Rwanda, and Burundi are still charged visa fees despite the protocol abolishing them.
In Tanzania, new restrictions have denied preferential access to some partner states, while excise duties on confectionery, dairy, and manufactured imports raise costs for Ugandan exporters. Certain animal products and cigarettes are also blocked or heavily taxed, despite EAC commitments.
Kenya, Uganda’s biggest trading partner, remains a tough market. Excise duties continue to bite on Ugandan eggs and sugar, while exports of tissue paper, exercise books, and petroleum products face VAT, standards, or certification hurdles. Licenses for agricultural goods such as poultry and milk are slowed down in layers of bureaucracy, delaying access to Kenyan shelves.
Meanwhile, in the Democratic Republic of Congo (DRC), customs delays and poor road infrastructure on routes such as Kasindi–Beni–Butembo and Bunagana–Goma increase transport costs and spoilage of perishable goods. Uganda has committed $65.9 million to upgrade critical roads as part of a joint program with Kinshasa, but bottlenecks remain.
The scale of the problem is not small. The EAC Secretariat estimates NTBs directly cost the region $16.7 million, with wider trade losses of nearly $95 million. For Uganda, intra-EAC trade has already dropped by $1.8 billion in recent years, hitting agriculture, manufacturing, and households hardest.
Kamukama attributes the persistence of NTBs to protectionism, weak standards recognition, poor infrastructure, and corruption. “If the barriers were removed, Africa could unlock an additional $20 billion in GDP, according to UNCTAD. For Uganda, the stakes are high—we cannot afford to be boxed out of the markets we depend on most,” he stresses.
Coffee was the outlier, recording higher earnings in June. Revenues from the crop increased by 18.7% compared to May, with exports rising to 1,014,062 60kg bags, up from 793,445 bags. This volume growth offset the decline in global coffee prices during the period, highlighting the crop’s resilience as one of Uganda’s top export.
By contrast, other key commodities registered notable declines. Gold earnings dropped from $485.83 million (sh1.77 trillion) in May to $477.37 million (sh1.74 trillion) in June. Cocoa beans fell steeply from $108.58 million (sh397 billion) to $39.29 million (sh143 billion). Tea declined from $6.53 million (sh23.8 billion) to $5.45 million (sh19.9 billion), while tobacco earnings shrank from $2.22 million (sh8.1 billion) to $1.56 million (sh5.7 billion).
On the other hand, export earnings rose to $1.154 billion (Sh4.2 trillion) in June 2025, marking a 64.3% jump from the $702.5 million (Sh2.6 trillion) recorded in the same month last year.
This was largely driven by higher earnings from coffee, gold, tea, fish, and flowers, with coffee emerging as the top performer.
Coffee earnings alone grew by 78.4% year-on-year, supported by both increased volumes and improved international prices. The crop continues to anchor Uganda’s foreign exchange inflows, sustaining households and contributing significantly to the balance of payments.
Export Destinations
The Middle East remained Uganda’s biggest market, taking in 34.8% of exports during June. Almost all of this trade, 98% went to the United Arab Emirates. The EAC bloc followed with 24.9%, though its share was clouded by the trade restrictions that weighed on several products. The European Union and Asia absorbed 19.5% and 13.4% of Uganda’s exports, respectively.
Imports Continue to Rise
While exports declined, imports surged. Merchandise imports increased by 8.8%, from $1,312.3 million (sh4.8 trillion) in May to $1,427.3 million (sh5.2 trillion) in June. The increase was fueled by higher formal private sector oil and non-oil imports.
Imports of animal and animal products rose by 53.6%, prepared foodstuffs, beverages, and tobacco by 23.9%, chemical products by 18.4%, petroleum products by 14.9%, and electricity by 21.8%. The growth in these categories indicates strong domestic demand but also underlines Uganda’s dependence on imports for essential commodities and inputs.
Sources of Imports
June saw a reshuffle in the origins of Uganda’s imports. The East African Community became the leading source, accounting for 34.8% of imports, overtaking Asia, which supplied 30.7%. The rest of Africa contributed 15.9% and the Middle East 11.6%. This marked a shift from May, when Asia had been Uganda’s largest import partner.
Trade Balance Worsens
The combination of lower exports and higher imports sharply widened Uganda’s merchandise trade deficit on a month-to-month basis. The deficit jumped by 138%, from $114.5 million (sh418 billion) in May to $272.9 million (sh997 billion) in June. This was driven by a decline in exports of $43.4 million (sh158 billion) alongside an increase in imports of $115.0 million (sh420 billion).
Regional Trade Balances
Uganda’s trade balances by region tell a mixed story. The country recorded surpluses with the Middle East and the European Union but deficits with other blocs.
The surplus with the Middle East stood at $236.1 million (sh862 billion) in June, though lower than the $278.7 million (sh1.02 trillion) recorded in May. The European Union surplus was $169.9 million (sh620 billion), also slightly down from $177.9 million (sh650 billion) the previous month.
Deficits were most severe with Asia, where Uganda’s imports far outweighed exports, resulting in a $283.1 million (sh1.03 trillion) gap. The rest of Africa contributed a deficit of $167.8 million (sh612 billion), while trade with the EAC left Uganda $209.5 million (sh764 billion) in the red.
