Uganda’s debt burden likely to worsen, says Bank of Uganda Bank of Uganda has warned that Uganda’s current account is likely to suffer due to expected decline in exports of agricultural products as a result of the long drought that hit most parts of the country. The central bank says this will aggravate Uganda’s current account position which is already in deficit. While presenting a report on the state of the economy this week in Kampala, the Bank of Uganda executive director for Research, Dr Adam Mugume, said the deficit in Uganda’s current account deteriorated by $345.8 million (Shs891.299 billion) in the months of May, June and July. Current account deficit occurs when a country’s expenditure on imports exceeds her export earnings. This situation makes a country a net debtor to the rest of the world and leads to outflow of her foreign exchange. Dr Mugume blamed the deficits on the trade balance and services account. “The trade balance deteriorated on account of higher import bill, largely due to higher private sector imports for investment, which accounted for 72.3 per cent of total imports,” he said. A trade balance is the difference in value over a period of time of a country’s imports and exports of merchandise. Currently, Uganda’s current account is financed by capital and financial account. During the three months, Uganda’s trade balance stood at $566.25 million (about Shs14.595 billion). However, Dr Mugume said the capital and financial account flowing into the country through Foreign Direct Inflows, inflows into the petroleum exploration companies and manufacturing enterprises will fund the deficit. THE NUMBERS Shs19.3 :The amount of Uganda’s total exports for the period of May to July. The central bank says imports declined by 6.1 per cent to Shs477.610 trillion) between January and July. Shs3.3tr: The total amount of Uganda’s import bill for the period between May and July. Of this, the government import constituted Shs234.5b, and Shs311.877 trillion for the private sector
Posted on: Sat, 07 Sep 2013 08:36:21 +0000
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