Uganda recorded a trade deficit of USD 16.92 million with East African Community (EAC) partners in February 2025. This marks a sharp turnaround from the USD 12.2 million surplus recorded just a month earlier, according to the Ministry of Finance’s March 2025 Performance of the Economy Report.
The deficit stems from a 10.3 percent fall in export earnings coupled with a 2.3 percent rise in imports. These shifts expose the persistent volatility in Uganda’s trade balance within the regional bloc.
Despite the overall shortfall, Uganda maintained trade surpluses with several neighbors. In February, positive balances were recorded with:
- Democratic Republic of Congo (USD 61.95 million)
- South Sudan (USD 39.38 million)
- Rwanda (USD 20.23 million)
- Burundi (USD 6.50 million)
These figures reflect the strong appetite for Ugandan goods in more import-reliant economies, especially in post-conflict or recovering regions like South Sudan and eastern DRC.
However, trade with the bloc’s more industrialized economies revealed growing gaps. Uganda posted a deficit of USD 9.53 million with Kenya and a staggering USD 135.55 million deficit with Tanzania. Tanzania remains Uganda’s largest source of imports within the EAC, driven heavily by petroleum products, rice, and sugar.
Still, Uganda’s trade performance shows year-on-year improvement. Export earnings to EAC states rose 10 percent, climbing from USD 191.75 million in February 2024 to USD 210.96 million in February 2025. Increased sales to Tanzania and Kenya were the main drivers behind this growth.
Imports also edged up modestly by 2.4 percent, reaching USD 227.88 million compared to USD 222.61 million a year earlier.
The shifting dynamics point to both opportunity and challenge for Uganda. Stronger ties with fragile economies present a clear advantage.
However, persistent deficits with Tanzania and Kenya spotlight a need for urgent reforms. Experts argue that Uganda must focus on strengthening local industries, boosting value addition, and cutting reliance on imported goods.
Moreover, the widening deficit with Tanzania highlights broader regional hurdles. High transport costs, non-tariff barriers, and weak trade logistics continue to weigh heavily on Uganda’s competitiveness.
As the EAC moves towards deeper integration through initiatives like the African Continental Free Trade Area (AfCFTA) and the EAC Monetary Union, Uganda’s future trade prospects hinge on strategic investment.
Building industrial capacity, modernizing infrastructure, and easing trade processes will be critical to reversing the trade imbalance.
The Finance Ministry’s latest report paints a complex picture. Uganda’s position in regional trade is evolving—shaped by immediate economic shocks and longer-term structural shifts.
