East African Business Week

KAMPALA, UGANDA- Uganda is registering a tremendous growth in export earnings, according to the country's central bank.
The rise in the export earnings has boosted aggregate demand. Bank of Uganda statistics show that in February this year, the total export earnings increased by 16% on annual basis to US$220m. This is compared to the 2% decline that was encountered in January.
According to Dr. Adam Mugume the director for research, month to month indicators show an increase of 12%, up from a monthly increase of 2% registered in January.
He attributed the increase to an overall improvement in earnings of non coffee exports especially cotton, tobacco and cobalt. Formal exports proceeds for February this year were estimated at US$178.9m, which is an increase of 32.6% and 11.1% compared to proceeds realized in February 2010 and January 2011.
Coffee exports amounted to 193,965 bags worth US$27.83m representing a decrease of 9.9% in volume. In addition, a decrease of 7.2% in value was realized during February this year compared to the previous months' proceeds due to unfavorable weather conditions and changing rain patterns that affected the collective yields harvested.
The unit price of coffee averaged US$2.4 per kilogram in February about 7US cents higher than it was in January.
Mugume added that coffee exports, in comparison to the same month last year, registered a decrease in volume of 27% but an increase in value of 5.4% led to the February surge in export earnings.
"Formal non coffee exports proceeds increased by 39.2% and 15.3% compared to proceeds realized in Febraury 2010 and January 2011 respectively," he stressed.
The preliminary estimate for informal crossborder trade exports during February was US$41.24m.
For the imports, Mugume explained that the import bill increased by 10% down from the annual increase of 25% registered in January 2011. "This was however a decline of 8% from what was realized in January 2011.
"Relative to January this year, government imports remained relatively stable at about US$28m while private sector imports declined to US$328m from US$360m in the same period," he stressed.
He added that the private sector imports that make up the largest component of total imports could be disaggregated into import goods for consumption and production.
Imports for both consumption and production continued to grow clearly showing the effect of import goods on economic activity.
Goods imported for production grew on year on year basis by 35% while those for consumption grew by 29%.
It means that import growth is increasingly driven by investments goods, which reflect domestic investment and therefore continued strengthening of economic activity.