Uganda’s Trade Deficit Widens as Imports Surge 33%, Coffee Earnings Fall

What the report says

Uganda’s merchandise trade deficit widened to about $598 million in June 2026, according to the Ministry of Finance’s July 2026 Performance of the Economy Report cited by Nile Post. The gap grew because imports rose much faster than exports, while coffee earnings — a key source of foreign exchange — dropped sharply. The report said imports climbed 33.2% year on year, compared with an 11% increase in export earnings.

The higher import bill was led mainly by the private sector and reflected stronger purchases of petroleum, machinery, vehicles, industrial inputs, and related goods. Merchandise imports reached about $1.88 billion in June 2026, up from roughly $1.41 billion a year earlier. Petroleum imports recorded one of the biggest jumps, and non-oil imports also increased, suggesting heavier spending on business inputs and consumer goods.

Exports rose to $1.28 billion, supported by gains in gold, cotton, electricity, tobacco, maize and flowers, but that was not enough to offset the import surge. Coffee earnings fell 36.3% to $184.43 million, with both export volumes and average prices declining. The ministry linked lower global coffee prices to higher supply from major producers such as Brazil and Vietnam.

The report also highlighted Uganda’s dependence on a limited set of markets, especially the United Arab Emirates, and said broader export diversification and value addition remain important for reducing exposure to external shocks. In general, trade balances like this matter because they can affect foreign exchange stability, manufacturing prospects and the country’s ability to finance imports over time.