Opening Rwanda Border Widens Uganda's Trade Surplus with EAC

The Ministry of Finance, Planning and Economic Planning said the rise in Uganda's trade surplus with the East African Community (EAC) was partly due to increase in exports to Rwanda, following the opening of the border earlier this year.

According to the report released by the ministry on Monday, the trade surplus with EAC in October stood at US$114.54 million, a growth of $43.49m from a surplus of US$ 71.05m recorded the same month the previous year.

"In October 2022, Uganda’s merchandise trade with the EAC resulted in a surplus of US$ 114.54 million, an increase from a surplus of US$ 71.05 million recorded a year ago. Over the same period, exports to EAC increased by 11.8% whereas imports decreased by 22.5%. There was an increase in export receipts from Rwanda from US$ 0.20 million in October 2021, to US$ 11.66 million in October 2022," reads the report.

"This followed the reopening of the Uganda- Rwanda border at the start of 2022. Within the EAC bloc, Kenya remains Uganda’s main trading partner. However, Uganda recorded a trade surplus with all EAC Partner States save for Kenya."

The border was opened following a series of meetings between Gen. Muhoozi Kainerugaba, the senior presidential advisor on Special Operations, and President Paul Kagame.

55.59% of Uganda's merchandise was bought by EAC member states in October 2022, followed by European Union (17.7%), then Asia (10.5%).

Compared to October 2021, Uganda‘s exports to all regions grew with an exception of the rest of Africa.

The report also indicates that the Uganda Shilling continued to strengthen against the US Dollar in November 2022.

On average, the shilling registered a rate of Shs3,760.2 per US$ down from Shs.3,822.3 per US$ recorded the previous month. 

Dollar inflows from NGOs, exports, investments in the oil sector, and remittances outweighed demand during the month leading to an appreciation of the Shilling by 1.6%. 

Furthermore, a decline in the global oil price reduced demand for the dollar. On the other hand, the shilling depreciated against the Euro and Pound Sterling by 1.0% and 2.2% respectively.

According to the report, prices for food and non-alcoholic beverages continued to drive Rwanda’s inflation on an upward trend to 33.8% in November from 31.0% the previous month.

On the other hand, the rate of price increase in Kenya and Uganda slightly slowed to 9.5% and 10.6% from 9.6% and 10.7% in October respectively. Tanzania’s annual inflation remained unchanged at 4.9% during the month.