logo

List of Acronyms

Acronym Expansion
B.Franc Burundian Franc
BOU Bank of Uganda
BTI Business Tendency Index
CBR Central Bank Rate
CIEA Composite Index of Economic Activity
DRC Democratic Republic of Congo
EAC East African Community
EFU Energy, Fuels and Utilities
FOB Free on Board
FX Foreign Exchange
FY Financial Year
GBP British Pound Sterling
ICBT Informal Cross Border Trade
KShs Kenyan Shilling
MDAs Ministries, Departments and Agencies
MOFPED Ministry of Finance, Planning and Economic Development
NGOs Non-Governmental Organisations
PAYE Pay as You Earn
PMI Purchasing Managers’ Index
PSC Private Sector Credit
R.Franc Rwandan Franc
T-Bills Treasury Bills
T-Bonds Treasury Bonds
TzShs Tanzanian Shilling
UBOS Uganda Bureau of Statistics
UShs / Shs Ugandan Shilling
US$ / USD United States Dollar
VAT Value Added Tax
YTM Yield to Maturity

Summary1

Real Sector

  • Annual Headline Inflation declined slightly to 10.6% in November 2022 from 10.7% the previous month following a drop in prices for fuel and transport services. However, prices for food items like matooke, beans, cassava, tomatoes, Irish and sweet potatoes continued to rise due to a poor harvest following unfavorable weather conditions experienced in some parts of the country in quarter one.

  • There was an improvement in economic activity in the month of October 2022 as indicated by an increase in the Composite Index of Economic Activity (CIEA) to 153.93 from 152.30 the previous month.

  • The Purchasing Manager’s Index (PMI) also indicated an increase in economic activity in November 2022 on account of higher output and new orders, particularly in the industry and services sectors. The PMI increased to 50.9 in November 2022 from 50.0 recorded the previous month

  • Business perceptions remained positive as the Business Tendency Index (BTI) remained above the threshold of 50 at 50.62 in November 2022.

Financial Sector

  • The Central Bank Rate (CBR) remained unchanged at 10% in November to control the upward inflationary pressures.

  • The Uganda Shilling continued to strengthen against the US Dollar in November 2022 as dollar inflows from exports, NGO’s and remittances outweighed demand during the month. On average, the shilling registered a rate of Shs. 3,760.2 per US$ down from Shs. 3,822.3 per US$ for the previous month.

  • Interest rates for treasury bills registered mixed movements during the month. The annualised yields for November were 11.40%, 13.28% and 15.40% for the 91, 182 and 364-day tenors, respectively, from 11.48%, 13.69% and 15.25% in October 2022. Yields on treasury bonds increased to 16.25% for the 2-year tenor and 17.50% for the 10 year tenor from 14.00% and 16.25%, respectively.

  • Commercial banks’ shilling denominated lending rates continued on an upward trend, increasing to a weighted average of 18.42% in October from 18.24% in September.

  • The value of private sector credit approved in October amounted to Shs. 1,148.1 billion down from Shs. 1,418.5 billion in September partly due to a decline in the loan requests received in October compared to September.

External Sector

  • Uganda’s merchandise trade with the rest of the world resulted in a lower deficit of US$ 301.67 million in October 2022 as more receipts from exports were realized coupled with a decline in imports compared to the previous month.

  • Export receipts increased to US$ 348.82 million in October 2022 from US$ 326.75 million registered in September 2022 driven by an increase in the export earnings of beans, fish, cocoa beans and crude vegetable oil products like sunflower.

  • The value of merchandise imported declined to US$ 650.48 million in October, 2022 from US$ 665.25 million in September mainly due to lower non-oil import prices and volumes for the month

Fiscal Sector

  • Government operations in November 2022 resulted in an overall deficit of Shs 983.21 billion, which was higher than the planned deficit of Shs 797.74 billion for the month. This was mainly on account of revenue shortfalls registered in the period under review.

  • Revenue and grants in November 2022 amounted to Shs 1,858.83 billion, an 80.6% performance rate against the Shs 2,306.63 billion target as both grants and domestic revenue collections fell short of their respective targets for the month.Shortfalls were mainly realized under taxes on international trade, VAT and excise duty on items like cement, cigarettes, soft drinks, beer, electricity and internet data.

  • Expenditure and net lending amounted to Shs 2,842.04 billion in November 2022, a 91.5% performance rate against the planned Shs 3,104.37 billion for the month. This performance was mainly on account of lower than planned spending on externally financed development activities during the month.

East African Community

  • Prices for food and non-alcoholic beverages continued to drive Rwanda’s inflation on an upward trend to 33.8% in November from 31.0% the previous month. On the other hand, the rate of price increase in Kenya and Uganda slightly slowed to 9.5% and 10.6% from 9.6% and 10.7% in October respectively. Tanzania’s annual inflation remained unchanged at 4.9% during the month.

  • Local currencies for Burundi, Kenya and Rwanda depreciated against the US Dollar by 0.3%, 0.7% and 0.8% respectively in November, 2022. The Uganda Shilling however gained by 1.6% while the Tanzanian shilling remained relatively stable against the US Dollar.

  • Uganda traded at a surplus of US$ 114.54 million with the EAC in October 2022, a significant improvement from a surplus of US$ 71.05 million recorded the same month the previous year. This was partly on account of an increase in exports to countries like Rwanda and a decline of imports from the region.

Real Sector Developments

Inflation

Annual Headline inflation slightly declined to 10.6% in November 2022 from 10.7% the previous month, mainly driven by a reduction in annual inflation for energy, fuel & utilities as well as core inflation.

Annual core inflation reduced slightly to 8.8 % in November 2022 from 8.9 % recorded the previous month majorly driven by a reduction in the cost of transport services as the prices of fuel continued to reduce. On the other hand, annual inflation for food crops and related items continued on an upward trend, increasing to 27.8% in November 2022 from 25.6% the previous month. This was mainly driven by significant increase in the prices for matooke, beans, cassava, tomatoes, Irish and sweet potatoes, among others. The increase in food prices was on account of a poor harvest following unfavorable weather conditions experienced in some parts of the country in quarter one.

Annual EFU inflation continued on a downward trend declining to 12.2% in November 2022 from 15.2% the previous month majorly driven by a reduction in the prices of liquid fuels especially petrol and diesel as international crude oil prices continue to decline. Prices also went down for firewood, paraffin and propane gas compared to the previous month.

Economic Activity2

The Composite Index of Economic Activity (CIEA) increased by 1.07% to 153.93 in October 2022 from 152.30 in September 2022, indicating an improvement in economic activity. This was mainly on account of; increased electricity consumption in the industry sector particularly manufacturing; and a slight improvement in the performance of financial services.

The Purchasing Manager’s Index (PMI) rose to 50.9 in November 2022 up from 50.0 in October 2022 signalling improved business conditions in the Ugandan private sector. Among the indicators used to compute the index; output, new orders, and employment increased as firms were able to secure new businesses during the month. Output rose particularly in the industry and services sectors. Nonetheless, input costs increased further, leading to another rise in selling prices despite the recent drop in fuel costs.

Business Perceptions

Business perceptions remained positive, as the Business Tendency Index (BTI) remained above the threshold of 50. Nevertheless, there was a reduction in the index from 52.95 in October 2022 to 50.62 in November 2022, reflecting less optimism in the business environment, particularly in the construction, wholesale trade and agriculture sectors. Reports from the survey indicate that players were affected by; delayed payments (construction sector), low cash flows (manufacturing sector), exchange rate fluctuations (wholesale trade sector), while some were affected by weather conditions in the agriculture sector.

Financial Sector Developments

Exchange Rate Movements

The Uganda Shilling continued to strengthen against the US Dollar in November, 2022. On average, the shilling registered a rate of shs. 3,760.2 per US$ down from of Shs.3,822.3 per US$ recorded the previous month. Dollar inflows from NGOs, exports, investments in the oil sector and remittances outweighed demand during the month leading to an appreciation of the Shilling by 1.6%. Furthermore, a decline in the global oil price reduced demand for the dollar.

On the other hand, the shilling depreciated against the Euro and Pound Sterling by 1.0% and 2.2% respectively.

Interest Rate Movements

The Central Bank Rate (CBR) remained unchanged at 10% in November 2022 following its earlier revision from 9% in September to 10% in October, in response to the persistent increase in consumer prices.

Lending Rates3

Consistent with the tight monetary policy stance, commercial banks’ shilling denominated lending rates continued on an upward trend, increasing to a weighted average of 18.42% in October 2022 from 18.24% in September 2022. This trend is also consistent with the increasing level of inflation in the economy over that period.

Similarly, foreign currency denominated lending rates increased from a weighted average of 7.19% in September, to 7.71% in October.

Government Securities

During the month, there were 2 T-Bill auctions and one T-Bond auction in the primary domestic securities market. Shs 878.58 billion (at cost) was raised, of which Shs 654.02 billion was from T-Bills and Shs 224.57 billion was from T-bonds. Of the amount raised, Shs 347.75 billion was issued for the refinancing of maturing domestic debt whereas Shs 530.83 billion went towards financing other items in the Government budget.

Breakdown of Government Securities (UShs Billion) [Source: MOFPED]
Total Issuances Financing other items in the Government budget Refinancing
Q1 2022/23 2,344.2 417.1 1,927.1
September 2022 1,245.6 598.9 646.6
October 2022 561.6 208.8 352.8
November 2022 878.6 530.8 347.7
FY 2022/23 to date 3,784.4 1,156.8 2,627.6

Annualised Yields (Interest Rates) on Treasury Bills

On average, yields (interest rates) reduced for the 91 and 182-day tenors, but increased for the 364-day tenor. During the month, two auctions of short term tenors were held with the second auction registering a decline in the yields across all tenors. This was partly due to the proposal made by Government to substitute a portion of domestic borrowing with external debt.

The annualised yields for November 2022 were 11.40%, 13.28% and 15.40% for the 91, 182 and 364-day tenors, respectively. This compares with 11.48%, 13.69% and 15.25%, the previous month.

All auctions for Treasury Bills were oversubscribed, with the average bid to cover ratio being recorded at 1.81 in November 2022.

Yields on Treasury Bonds4

During the month, Government reopened two T-Bond instruments, i.e 2-year and 10-year tenors. The Yield to Maturity (YTM) on the 2-year tenor recorded an increase from 14.00% in August to 16.25% in November 2022. Similarly, the rate on the 10-year note increased to 17.50% in November from 16.25% in August.

Outstanding Private Sector Credit5

The stock of outstanding private sector credit increased by 1.1% from Shs. 19,615.0 billion in September 2022 to Shs. 19,827.4 billion in October 2022.

Credit Extensions6

The value of credit approved in October 2022 amounted to Shs. 1,148.1 billion down from Shs. 1,418.5 billion the previous month. The reduction in credit approved was partly due to a decline in the loan requests received in October 2022 compared to September 2022 despite an improvement in the loan approval rate to 64.2% in October 2022 from 58.9 % the previous month.

As was the case in September 2022, Personal and Household loans continued to constitute the largest share of credit approved in October 2022 at 27.7%, followed by trade (22.0%), manufacturing (17.7%) and Building, Construction and Real Estate (14.5%). The share of credit extended to the manufacturing sector picked up from 5.0% in September 2022 to 17.7%.

External Sector Developments

Merchandise Trade Balance7

Comparison between the months of September and October 2022 showed an increase in export receipts and a decrease in the import bill. This resulted in a 10.9% reduction of the merchandise trade deficit to US$ 301.67 million in October 2022 from US$ 338.51 million the previous month.

On the other hand, compared to the same month the previous year, the merchandise trade deficit widened from US$ 245.10 million to US$ 301.67 million in October 2022 following a higher increase in the import bill that more than offset the growth in export receipts.

Merchandise Exports

Export receipts increased both on a monthly and annual basis. Export receipts amounted to US$ 348.82 million in October 2022, an increase of 6.8% from US$ 326.75 million registered in September 2022. This development largely followed an increase in the export receipts of beans, fish, cocoa beans and crude vegetable oil products like sunflower.

Merchandise Exports by Product (US$ Million) [Source: BOU and MOFPED Calc.]
Product Oct-2021 Sep-2022 Oct-2022 Oct-2022 vs
Oct-2021
% Change 		Oct-2022 vs
Sep-2022
% Change
Total Exports 286.39 326.75 348.82 21.8 6.75
Coffee
Value Exported 61.43 71.22 67.1 9.22 -5.79
Volume Exported (Millions of 60 Kg Bags) 0.49 0.5 0.46 -6.02 -9.22
Average Unit Value (US$ per Kg of Coffee) 2.1 2.36 2.45 16.22 3.78
Non-Coffee Formal Exports 178.94 213.9 240.12 34.19 12.26
of which:
Cotton 0.57 0 0 -99.86 30.96
Tea 8.3 5.69 8.11 -2.24 42.65
Tobacco 4.41 4.28 3.67 -16.96 -14.44
Simsim 0.44 1.82 2.16 394.37 18.63
Fish & Its Prod. (Excl. Regional) 11.69 10.37 14.6 24.92 40.79
Maize 1.79 5.5 4.89 173.61 -11.22
Beans 7.91 5.12 9.9 25.04 93.4
Flowers 4.58 4.02 4.01 -12.5 -0.26
Mineral Products 0 13.38 0.29 Inf -97.87
Cement 7.6 6.1 7.66 0.78 25.5
Cocoa Beans 6.16 2.98 7.09 15.18 138.02
Base Metals & Products 13.19 20.32 16.2 22.81 -20.27
Crude Oil (Excl Petroleum Products) 7.64 7.76 10.8 41.26 39.25
Plastic Products 7.44 4.24 3.85 -48.27 -9.35
Sugar 6.83 11.68 6.45 -5.64 -44.8
Fruits & Vegetables 3.35 3.98 5.54 65.27 39.07
Vanilla 1.41 2.92 1.91 35.95 -34.58
ICBT Exports 46.02 41.62 41.59 -9.62 -0.06

Comparison between October 2021 and October 2022 shows a 21.8% increase in export receipts from US$ 286.39 million to US$ 348.82 million.

Destination of Exports8

In the month of October 2022, the East African Community (EAC) was Uganda’s top destination for merchandise exports, followed by European Union, then Asia. 55.59% of Uganda’s merchandise exports were absorbed by the EAC in October 2022. Compared to October 2021, Uganda`s exports to all regions grew with an exception of the Rest of Africa.

Merchandise Imports9

Merchandise worth US$ 650.48 million was imported during the month of October, 2022. Due to a decline in non-oil import prices and volumes, the value of imports dropped by 2.2% from the previous month. Imports of mineral products (excluding petroleum products), vegetable products, beverages, fats and oil and animal products registered the largest declines during the month.

On the other hand, the value of oil imports registered an increase of 11.2% from the previous month. However, the increase was more than offset by the decline in non-oil imports.

Origin of Imports

Asia remained the biggest source of imports during the month under review, accounting for 49.4% of the total imports. This was followed by Middle East and European Union that accounted for 18.1% and 13.7% of the total imports, respectively. Within the EAC, Kenya and Tanzania contributed 90% of the total imports from the region.

Trade Balance by Region10

Uganda continued to trade at deficits with its main trading partners Asia and Middle East, save for the EAC where it registered the biggest surplus partly due to an increase in exports to the region during the month.Trade with European Union resulted in a deficit of US$ 27.39 million owing to an increase in merchandise imported from the region in October 2022.

Merchandise Trade Balance by Region (US$ Million) [Source: BOU]
Region Oct 2021 Sep 2022 Oct 2022
European Union 14.91 4.33 -27.39
Rest of Europe -6.03 -0.74 2.7
Middle East -103.94 -105.85 -106.91
Asia -218.16 -287.53 -284.82
EAC 71.05 86.88 114.54
Rest of Africa 3.47 -12.36 -4.58
Other Countries -6.41 -23.24 4.79

Fiscal Developments11

Preliminary data shows that government operations in November 2022 resulted in an overall deficit of Shs 983.21 billion, which was higher than the Shs 797.74 billion planned for the month. This was on account of shortfalls in domestic revenues and grants in November 2022 which more than offset the lower than planned expenditure during the month.

Summary Table of Fiscal Operations November 2022 (UShs Billion) [Source: MOFPED]
Shs Billion Program Outturn Performance Deviation
Revenues and grants 2,306.63 1,858.83 80.6% -447.8
      Revenues 1,981.58 1,855.6 93.6% -125.98
            Tax 1,830.46 1,741.09 95.1% -89.37
            Non-tax 151.12 114.51 75.8% -36.61
      Grants 325.05 3.23 1.0% -321.82
                  o/w Project support 325.05 3.23 1.0% -321.82
Expenditures and lending 3,104.37 2,842.04 91.5% -262.33
      Current expenditures 1,707.02 2,206.94 129.3% 499.92
            Wages and salaries 535.16 538.76 100.7% 3.61
            Interest payments 406.1 555.2 136.7% 149.1
                  o/w domestic 366.49 515.59 140.7% 149.1
                  o/w external 39.61 39.61 100.0% 0
            Other recurrent expenditure 765.76 1,112.97 145.3% 347.21
      Development expenditures 1,292.18 608.61 47.1% -683.57
            Domestic 539.9 425.49 78.8% -114.4
            External 752.28 183.11 24.3% -569.17
      Net lending/repayments 76.72 0 0.0% -76.72
                  o/w HPP GoU 0 0 __ 0
      HPP Exim 76.72 0 0.0% -76.72
      Domestic arrears repayment 28.45 26.49 93.1% -1.95
Domestic fiscal balance -797.74 -983.21 __ __

Revenue and Grants

Revenue and grants in November 2022 amounted to Shs 1,858.83 billion, an 80.6% performance rate against the Shs 2,306.63 billion target as both grants and domestic revenue collections fell short of their respective targets for the month.

Domestic Revenues

During November 2022, domestic revenue collections amounted to Shs 1,855.60 billion, a 93.6% performance against the target. Of this, tax revenue collections accounted for Shs 1,741.09 billion while non-tax revenue amounted to Shs 114.51 billion as both categories registered shortfalls during the month.

Tax revenue collections performed at 95.1% amounting to Shs. 1,741.09 billion during the month. The registered shortfall of Shs 89.37 billion was mainly under the categories of taxes on international trade and indirect taxes. This more than offset the surplus registered for direct tax collections during the month.

Indirect tax collections for the month amounted to Shs 428.72 billion, registering a Shs 31.75 billion shortfall as both VAT and excise duty collections on goods and services particularly cement, cigarettes, soft drinks, beer, electricity, internet data among others was lower than projected during the month.

Similarly, taxes on international trade posted a Shs 101.9 billion shortfall for the month. This was mainly on account of lower than planned collections for petroleum duty, excise duty and VAT on imports as import volumes were lower than earlier anticipated.

On the other hand, direct tax collections amounted to Shs 585.41 billion against the planned Shs 529.90 billion for the month. This was on account of higher than planned collections for PAYE, corporate tax, withholding tax among others mainly driven by a pickup in economic activity particularly in the oil and gas sector.

Expenditure and net lending

Expenditure and net lending amounted to Shs 2,842.04 billion in November 2022, a 91.5% performance rate against the planned Shs 3,104.37 billion for the month. This performance was mainly on account of lower than planned spending on development activities during the month.

Performance of development expenditure totaling to Shs 608.61 billion, a 47.1% performance against the target, was mainly affected by the lower than planned spending on externally financed development activities during the month. However, it should be noted that performance of the external development budget is tied to the disbursement of funds by external development partners which is done after receipt of interim payment certificates showing work accomplished by contractors.

On the other hand, expenditure on recurrent items other than wage amounted to Shs 1,112.97 billion, which was 45.3% higher than the planned Shs 765.76 billion for the month. This followed the release of funds for the Parish Development Model and EMYOOGA (Microfinance Support Centre) that was initially planned for Quarter one (Q1) but was not released then. Additionally, there was a supplementary expenditure during the month to Uganda Development Corporation for the Atiak Sugar Factory.

East Africa Community Developments

EAC Inflation12

Annual headline inflation continued on an upward trend for Rwanda, increasing to 33.8% in November from 31.0% the previous month, mainly driven by a surge in the prices for food and non-alcoholic beverages. On the other hand, Kenya’s annual headline inflation declined slightly to 9.5% in November from 9.6% in October as fuel and food prices eased. Tanzania’s annual inflation remained unchanged at 4.9% in November compared to the previous month.

EAC Exchange Rates

Within the EAC, local currencies for Burundi, Kenya and Rwanda registered losses against the US Dollar by 0.3%, 0.7% and 0.8% respectively in November, 2022. However, the Uganda Shilling gained by 1.6% while Tanzanian shilling remained relatively stable against the US Dollar.

Trade Balance with EAC

In October 2022, Uganda’s merchandise trade with the EAC resulted in a surplus of US$ 114.54 million, an increase from a surplus of US$ 71.05 million recorded a year ago. Over the same period, exports to EAC increased by 11.8% whereas imports decreased by 22.5%. There was an increase in export receipts from Rwanda from US$ 0.20 million in October 2021, to US$ 11.66 million in October 2022. This followed the reopening of the Uganda- Rwanda border at the start of 2022.

Within the EAC bloc, Kenya remains Uganda’s main trading partner. However, Uganda recorded a trade surplus with all EAC Partner States save for Kenya.

Glossary

Term Description
Bid to cover ratio This is an indicator for the demand of Government securities in a given auction. A ratio equal to 1 means that the demand for a particular security is equal to the amount offered by the government. A ratio less than 1 means the auction is under subscribed and a ratio greater than 1 means that the auction is over subscribed.
BTI The Business Tendency Index measures the level of optimism that executives have about current and expected outlook for production, order levels, employment, prices and access to credit. The Index covers the major sectors of the economy, namely construction, manufacturing, wholesale trade, agriculture and other services. The Overall Business Tendency Index above 50 indicates an improving outlook and below 50 a deteriorating outlook.
CIEA CIEA is constructed using seven variables, that is; private consumption estimated by VAT, private investment estimated by gross extension of private sector credit, government consumption estimated by its current expenditure, government investment estimated by its development expenditure, excise duty, exports and imports. Data comes with a lag of one month.
Core Inflation This is a subcomponent of headline inflation that excludes items subject to volatility in prices. It excludes energy, fuels, utilities, food crops and related items.
Headline Inflation This refers to the rate at which prices of general goods and services in an economy change over a period of time usually a year.
Tenor This refers to the time-to-maturity of a financial instrument, for example, if a certain instrument matures after 91 days – it is called a 91-day tenor.
PMI The PMI is a composite index, calculated as a weighted average of five individual sub-components; New Orders (30%), Output (25%), Employment (20%), Suppliers’ Delivery Times (15%), and Stocks of Purchases (10%). It gives an indication of business operating conditions in the Ugandan economy. The PMI above 50.0 signals an improvement in business conditions, while readings below 50.0 show a deterioration. The PMI is compiled on a monthly basis by Stanbic Bank Uganda.
Yield to Maturity (YTM) Yield to maturity (YTM) is the total return anticipated on a treasury instrument if the instrument is held until it matures.

Online Resources

Visit us online at mepd.finance.go.ug.

The entire history of data used for this and previous Performance of the Economy Reports - subject to data revisions - can be downloaded at mepd.finance.go.ug/apps/macro-data-portal.

An interactive display of leading economic indicators and a GDP nowcast is available at mepd.finance.go.ug/apps/macro-monitor.

  1. Data on Private Sector Credit, CIEA and External sector has a lag of one month.↩︎

  2. Data on CIEA has a lag of one month.↩︎

  3. Data comes with a month lag.↩︎

  4. Reopening a bond instrument refers to issuing additional amounts using previously issued bond instruments. The reopened instrument has the same maturity date and coupon interest rate as the original instrument, but with a different issue date and different purchase price.↩︎

  5. Data on private sector credit has a lag of one month.↩︎

  6. Data on private sector credit has a lag of one month.↩︎

  7. Statistics on trade come with a lag of one month.↩︎

  8. Others include: Australia and Iceland.↩︎

  9. Statistics on trade come with a lag of one month.↩︎

  10. Other Countries included Americas & others↩︎

  11. Fiscal data is preliminary.↩︎

  12. Data for Burundi, DRC and South Sudan not readily available.↩︎