Imports from China fell in January, forcing through a drop of Shs6b in Uganda’s import bill from the world’s second largest economy.
This is a breakaway from decades of a growing import bill from China, mainly supplemented by other parts of Asia and the Middle East.
According to details released by the central bank, Uganda’s trade with leading imports source, China, stood at $108.14m (Shs400b) in the month under review from $109.82m (Shs406b) in December.
The drop is expected to worsen due to the threat of Corona virus that is buffeting global markets and trade. In an interview recently, Uganda Revenue Authority Manager Corporate Affairs Ian Rumanyika, told Daily Monitor that whereas they had not assessed the impact of Corona virus, it is expected to cause a drop in the flow of goods, especially from China.
The Corona catastrophe has also had serious effects on the shilling forcing it to slightly depreciate to Shs3,700 by close of the week. Mr Geoffrey Kiyemba Muleega, the Bicco Forex Bureau managing director, at the weekend said the dollar had started to shoot upwards due to China’s close off to the rest of the world.
In his weekly forex analysis, Mr Stephen Kaboyo, the Alpha Capital lead partner, said the movements in the shilling could be influenced by dividends payouts and less by importers due to continued Challenges in China.
Imports from other regions such as Europe, and the rest of Africa, also registered declines. In the period under review, Uganda’s import bill from Europe stood at $41.7m (Shs154b) down from $44.8m (Shs165b) in December.
However, imports from the Middle East and Comesa grew with the two regions remaining some of Uganda’s leading source of imports.
According to the Bank of Uganda report, in January Uganda imports from the Middle East stood at $107m (Shs395b) up from $89m (Shs329b) in December while imports from Comesa stood at $98m (Shs362b) from $84m (Shs310b) in the period under review.
First time in decades Whereas Uganda’s import bill grew to $585.3m (Shs2.1 trillion) in January up from $549m (Shs2 trillion) in December for the first time in decades, imports from China fell.
China has for decades remained Uganda’s biggest source of imports followed by Comesa and parts of the Middle East.
Although it is difficult to assess the cause of the drop, experts have warned the drop will worsen given the Corona virus catastrophe that continues to buffet China and spreading to other European and the Americas capitals.