P. Sarojini
Uganda (CWBN)_ A report from Bank of Uganda stated that gold receipts have dominated the export earnings of Uganda since 2017, and it has now decreased for the first time following years of an annual boom. For the first time in the past three years, due to the prevailing Covid-19 pandemic outbreak, Uganda’s gold exports declined, reflecting weak demand in international commodity trading.
According to the data from Bank of Uganda, the decline in gold has affected the country’s exports to main markets, including the Middle East and the Common Market for East and Southern Africa (Comesa), as well as the overall output of the export industry in October. For example, revenue from commodity decreased from $221 million (Shs817b) in September to $165 million (Shs610b) in October, which dramatically impacted Middle East export revenue.
The exports to the Middle East plummeted from $224 million (Shs828b) in September to $169 million (Shs625b). In terms of exports, Uganda mainly deals with United Arab Emirates. Uganda exports most of its products to the UAE, with the major commodity being gold. According to statistics from the Bank of Uganda, from the country’s total export to the Middle East, gold makes up an average revenue of $200 million.
Most of the gold exported from Uganda are re-exports from DR Congo. Dr Fred Muhumuza, a well-known economist and lecturer at the Makerere University School of Economics, reported that it was difficult to predict the sustainability of Uganda’s gold exports as it was quite hard to find its sources. On the back of declining volumes to DR Congo, Burundi, Sudan and South Sudan, exports to Comesa plummeted to $107 million (Shs395b) from $113 million (Shs418b).
Dr Muhumuza observed, however, that the decline may have been the result of decreased volumes of seasonal products, especially in agriculture. He said, “This is not yet a harvest period until end of December and January. This could be the reason for the drop in exports to Comesa since many of our neighbors buy food from us”. He acknowledged that re-exports may have declined over the time, which eventually impacted the overall results.
