The Government projected to collect domestic revenue worth Shs2,137.35 billion in October 2023 of which Shs1,974.96 billion would be tax revenue while Shs162.39 billion would be non-tax revenue.
However, a total of Shs1,984.27 billion was collected during the month, implying a shortfall of Shs153.08 billion (7.2% below the target for the month).
Tax revenue collections amounted to Shs1,865.41 billion translating into a shortfall of Shs109.55 billion (5.5% below target) for the month.
Similarly, indirect domestic taxes were lower than the target for the month by Shs 42.49 billion, having amounted to Shs 490.66 billion vis-a-vis a target of Shs 533.15 billion.
Both Excise duty and VAT were short of their respective targets by Shs20.08 billion and 22.41 billion respectively.
According to the Ministry of Finance, the shortfall was mainly due to underperformance of taxes on international trade transactions under which Shs744.63 billion was collected against a target of Shs878.16 billion, implying a shortfall of Shs133.54 billion.
This followed lower than anticipated imports on which VAT on imports is levied, as well as less than anticipated petroleum imports during the month.
The value of merchandise imports decreased by 8.9% from USD 1,019.60 million in August 2023 to USD 928.41 million in September 2023.
This decrease was largely attributed to lower private sector imports, particularly mineral products, petroleum products, chemical & related products and wood and wood products.
However, a comparison with the same month last year shows that merchandise imports grew by 37.6% from USD 674.59 million in September 2022, to USD 928.41 million in September 2023.
This increase was mainly driven by higher import volumes for mineral products, petroleum products, machinery equipment, vehicles and accessories, and textiles & textile products, among others.
Origin of Imports
In September 2023, Asia remained Uganda’s largest source of imports, accounting for 35.2% of the total imports. Within Asia, China and India remained the major contributors, accounting for 72.6% of the imports from the region.
Other notable regions included the East African Community (EAC), the Middle East, and the Rest of Africa, which accounted for 25.9%, 18.3%, and 11.6% of the total imports respectively.
According to the Ministry of Finance’s monthly performance report for October, within the EAC region, Tanzania and Kenya emerged as the lead sources of Uganda’s merchandise imports, accounting for 56.7% and 31.0%, respectively.
Merchandize Trade Balance
During September 2023, Uganda’s trade deficit with the rest of the world narrowed both on a monthly and annual basis, owing to a decrease in the import bill that more than offset the reduction in export receipts.
Between August and September 2023, the merchandise trade deficit narrowed by 15.3% from USD349.72 million to USD296.35 million.
Year-on-year comparison shows that the merchandise trade deficit narrowed by 14.7% from USD347.30 million in September 2022 to USD296.35 million in September 2023.
Uganda exported merchandise worth USD 632.06 million in September, 2023. This represented a 5.6% decline in comparison to USD 669.88 million exported in August 2023.
“This decrease was majorly attributed to lower export earnings from beans, maize, tobacco, flowers and coffee registered during the month,” reads the Ministry of Finance’s October performance report.
In comparison to the same month the previous year, merchandise exports grew by 93.1% from USD327.28 million in September 2022 to USD632.06 million in September 2023. This was attributed to increased export earnings from gold, coffee, maize among others.
Coffee exports during the month amounted to USD94.39 million, a 22.4% decrease from USD121.64 million registered in August 2023.
The Ministry of Finance attributed this decline to the end of the coffee harvesting season in the Greater Masaka and South-Western regions (May to August), as well as the reduction in the international price of Robusta coffee during the month.
However, a comparison with the same month last year shows that coffee exports grew by 32.5% from USD 71.22 million in September 2022, to USD94.39 million in September 2023.
This was largely attributed to the increase in Robusta coffee exports, partly driven by a good crop harvest in the South-Western region and prevailing good prices on the global scene which prompted exporters to off-load coffee from their warehouses for sale.
Destination of Exports
In September 2023, the EAC remained the top destination of Uganda’s exports, accounting for 39.6% of the total market share.
Within the EAC region, the top three destinations for Uganda’s exports were Kenya, the Democratic Republic of Congo and South Sudan taking up 26.2%, 25.0%, and 22.4% of the total exports, respectively. The Middle East and Asia emerged as the second and third top destinations for Uganda’s exports, accounting for 21.5% and 19.6% respectively.
Trade Balance by Region
In June 2023, Uganda traded at deficits with Asia, rest of Africa, the Middle East and rest of Europe worth USD 202.81 million, USD79.42 million, USD34.07 million and USD8.92 million, respectively.
On the other hand, trade surpluses were registered with the European Union and EAC at USD 31.22 million and USD 9.45 million respectively.