October 2024
Performance of the Economy Report
Ministry of Finance, Planning and Economic Development
2024-11-25
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
Economic activity continued to improve with all the high frequency indicators of economic activity i.e. the Composite Index of Economic Activity (CIEA) and Purchasing Managers’ Index (PMI) indicating positive economic conditions or trends.
The Composite Index of Economic Activity (CIEA) grew by 0.2 percent to 167.2 in September, 2024 compared to 166.9 in August 2024. The Purchasing Managers’ Index (PMI) was recorded at 52.9 in October 2024, above the 50-mark threshold signalling an improvement in the business health of the Ugandan private sector. This was mainly explained by increased demand as reflected by sustained expansions in new orders.
Similarly, perceptions about doing business as shown by the Business Tendency Index (BTI), remained positive. The BTI was recorded at 57.51 in October 2024 compared to 57.47 the previous month, above the 50-mark threshold, indicating continued optimism about business conditions.
Annual headline Inflation continued on a downward trend for the third consecutive month, reducing to 2.9 percent in October 2024 compared to 3.0 percent registered in September 2024. This decline was driven by lower prices for various food items, such as matooke, tomatoes, beans, and irish potatoes, as well as a reduction in liquid energy prices (petrol, diesel and liquefied gas prices)
Financial Sector
In October 2024, the Ugandan Shilling appreciated by 1.2 percent against the US Dollar (USD) to an average mid-rate of Shs 3,667.93/USD compared to an average midrate of Shs 3,711.31/USD in September 2024. This appreciation was mainly supported by a prudent monetary policy and higher inflows from Non-Government Organizations (NGOs), remittances, and offshore players partly due to better returns on domestic investments as global interest rates reduced.
In October, Bank of Uganda reduced the Central Bank Rate (CBR) by 25 basis points to 9.75 percent from 10 percent in September 2024, on account of a stable inflation outlook.
The weighted average lending rates for the Shilling-denominated credit decreased from 19.06 percent in August 2024 to 18.84 percent in September, 2024. This decline was partly attributed to low inflation and increased lending towards prime corporate borrowers, who banks charge lower interest rates due to their lower risk profile.
In September 2024, the stock of outstanding Private Sector Credit decreased by 0.3 percent to Shs 22,209.11 billion from Shs 22,284.81 billion in August 2024. This decline was partly driven by higher repayments, which more than offset new disbursements.
In October 2024, the Government raised a total of Shs. 2,565.6 billion from two Treasury Bill auctions and two treasury bond auctions. Of this, Shs. 610.8 billion was from T-Bills while Shs 1,954 .8 billion was from the T-Bond auctions.
Yields (interest rates) on Treasury Bills remained largely unchanged in October 2024. The annualized yields for the 364-day remained at 14.5 percent while the 182-day marginally increased to 14.5 percent from 14.4 percent in September 2024. On the other hand, the 91-day reduced to 10.8 percent from 11.1 percent registered in the previous month.
Save for the 5-year tenor which remained at 16.00 percent, yields on Treasury Bonds slightly increased across all tenors issued compared to their previous issuance. Yields for the 2-year, 3-year, 10-year, 15-year and 20-year tenors increased to 15.75 percent, 15.50 percent, 16.25 percent ,16.75 percent, and 16.86 percent in October 2024 from 15.50 percent, 15.25 percent, 15.75 percent, 16.50 percent and 16.50 percent, respectively.
External Sector
In September 2024, export earnings increased by 8.2 percent to USD 682.69 million from USD 631.17 million the same month the previous year. This was mainly due to increase in coffee prices during the year. However, in comparison to August 2024, export earnings decreased by 14.1 percent from USD 794.52 million mainly attributed to lower export earnings from coffee, mineral products, among others during the month.
On annual basis, the import bill rose by 14.0 percent to USD 1,051.53 million from USD 922.73 million in September 2023. However, om monthly basis, the value of merchandise imports declined by 1.7 percent, from USD 1,070.19 million in August 2024 mainly attributed to lower volumes of both Government project imports and formal private sector imports.
The annual merchandise trade deficit increased by 26.5 percent, from USD 291.56 million in September 2023 to USD 368.84 million in September 2024. Similarly, the monthly merchandise trade deficit with the rest of the world widened by 33.8 percent to USD 368.84 million in September 2024 from USD 275.67 million in August 2024 as the decline in export receipts more than offset the decrease in the import bill.
Fiscal Sector
Government fiscal operations in October 2024 resulted in a net borrowing of Shs. 1,024.99 billion, which was lower than the planned Shs. 1,994.78 billion for the month. This was mainly due to lower than expected disbursements of externally financed projects partly reflecting institutional capacity challenges of implementing Ministries Departments and Agencies (MDAs). Overall, Government operations for the month show that both expenses and net acquisition of non-financial assets were below their respective program targets.
Total revenue collections in the month of October 2024 amounted to Shs. 2,316.48 billion against the planned target of Shs. 2,614.88 billion registering a shortfall of Shs. 298.40 billion. This shortfall was largely driven by lower-than-anticipated performance of grants and tax revenue collections during the month. The shortfall in tax revenues was mainly due to lower-than-expected collections from international trade, domestic trade of goods and services while the shortfall in grants arose from low disbursements from Development Partners.
Total Government expenses amounted to Shs. 2,810.99 billion against program of Shs. 3,289.34 billion. This lower-than planned spending was largely attributed to lower absorption of funds by Central Government votes partly arising from delays in the payment of wages and salaries of the judiciary, health sector and prison services in October 2024.
The net acquisition of non-financial assets during the month of October 2024, amounted to Shs. 530.43 billion which was lower-than the program of Shs.1,320.32 billion. This underperformance was largely due to limited capacity to absorb foreign disbursements by Ministries, Departments and Agencies.
In September 2024, Uganda traded at a deficit of USD 68.88 million with the rest of the EAC Partner States compared to a deficit of USD 74.39 million registered the previous month. This was due to a larger reduction in imports, which offset the decline in exports. Imports from the region decreased by 2.8 percent to USD 264.10 million in September 2024, down from USD 271.62 million the previous month. Exports to the region also declined by 1.0 percent from USD 197.23 million to USD 195.22 million over the same period.
In October 2024, local currencies within the EAC Partner States leaned mostly towards depreciation. The Tanzanian Shilling, Rwandan and Burundian Francs depreciated by 0.8 percent, 1.0 percent and 0.2 percent, respectively. The Kenyan Shilling remained unchanged, trading at an average mid-rate of KShs/USD 129.2 both in September and October 2024.
There was a downward trend in annual headline inflation across the EAC Partner States in October 2024. Annual headline inflation in Kenya and Tanzania declined to 2.7 percent and 3.0 percent in October 2024, from 3.6 percent and 3.1 percent in the previous month, respectively. Burundi’s annual headline inflation increased from 18.2 percent in August 2024 to 23.3 percent in September 2024, while Somalia’s reduced from 5.9 percent to 5.3 percent over the same period. In addition, annual headline inflation in South Sudan increased from 97.3 percent in June 2024 to 107.3 percent in July 2024, while Democratic Republic of Congo’s decreased from 22.2 percent to 16.4 percent over the same period.
1 Real Sector Developments
1.1 Inflation
Annual headline inflation continued on a downward trend for the third consecutive month, reducing to 2.9 percent in October 2024 compared to 3.0 percent registered in September 2024. This was attributed to a decline in both annual Energy, Fuel and Utilities (EFU) inflation and annual food crops & related items inflation.
Annual Energy, Fuels and Utilities (EFU) inflation decreased to 3.3 percent in October 2024 compared to 4.5 percent the previous month. This was mainly on account of a reduction in prices of liquid energy (petrol, diesel and liquefied gas prices) during the month. Specifically, average pump prices were Shs 5,205 per liter for petrol and Shs 4,765 per liter for diesel, down from Shs 5,311 and Shs 4,839, respectively, in September 2024.
Similarly, annual food crops and related items inflation continued to decelerate due to good harvests resulting from favourable weather conditions and Government interventions within the agriculture sector such as agricultural extension services. In October 2024 annual food crops and related items inflation was recorded at minus 5.3 percent compared to minus 4.1 percent in the previous month. This was mainly attributed to a drop in the prices of matooke (minus 8.0 percent versus 4.9 percent) tomatoes (minus 14.2 percent versus minus 4.1 percent), and beans (minus 4.4 percent versus minus 2.5 percent). There was also a slowdown in the rate at which prices of irish potatoes increased from 26.0 percent in September 2024 to 11.8 percent in October 2024.
However, annual core inflation increased to 3.9 percent compared to 3.7 percent in the previous month. This was mainly due to a rise in annual services inflation (6.2 percent in September from 5.8 percent the previous month) due to an increase in the cost of accommodation and road transport services partly arising from longer routes following the closure of some bridges like Karuma.
1.2 Economic Activity
Economic activity has continued to improve with all the high frequency indicators of economic activity i.e. the Composite Index of Economic Activity (CIEA) and Purchasing Managers’ Index (PMI) reflecting positive economic conditions. Similarly, perceptions about doing business as shown by the Business Tendency Index (BTI), remained optimistic.
The Composite Index of Economic Activity (CIEA) grew by 0.2 percent to 167.2 in September, 2024 compared to 166.9 in August 2024.
In October, 2024 the Purchasing Managers’ Index (PMI) was recorded at 52.9, above the 50-mark threshold signalling improvement in the business health of the Ugandan private sector. This was mainly explained by sustained expansions in new orders as firms hired additional staff amidst positive expectations for output in the coming year.
However, compared to September 2024, the index declined due to increased input costs arising from higher input prices and staff costs during the month.
1.2.1 Business Perceptions4
Perceptions about doing business as shown by Business Tendency Index (BTI) remained optimistic. The BTI was recorded at 57.51 in October 2024 compared to 57.47 the previous month, above the 50-mark threshold, indicating continued optimism about business conditions. Higher optimism was registered mainly in agriculture (54.91 versus 53.96).
2 Financial Sector Developments
2.1 Exchange Rate Movements
In October 2024, the Ugandan Shilling appreciated by 1.2 percent against the US Dollar (USD) to an average mid-rate of Shs 3,667.93/USD compared to an average midrate of Shs 3,711.31/USD in September 2024. This appreciation was mainly supported by a prudent monetary policy and higher inflows from Non-Government Organizations (NGOs), remittances and offshore players partly due to better returns on domestic investments as global interest rates reduced.
2.2 Interest Rate Movements
Bank of Uganda reduced the Central Bank Rate (CBR) by 25 basis points to 9.75 percent in October 2024 from 10 percent the previous month, on account of a stable inflation outlook.
This positive outlook was largely attributed to continued recovery of the global economy, a stable exchange rate supported by export receipts and moderate import growth, and a prudent monetary policy that has effectively supported economic growth recovery while maintaining price stability.
2.2.1 Lending Rates5
The weighted average lending rates for the Shilling-denominated credit decreased from 19.06 percent in August 2024 to 18.84 percent in September, 2024. This decline was partly on account of increased lending towards prime corporate borrowers, who banks charge lower interest rates due to their lower risk profile. It is worth noting that there was a general fall in lending rates across most of the key sectors save for trade.
On the other hand, the weighted average lending rates for foreign currency-denominated credit increased to 8.79 percent in September 2024 from 8.66 percent the previous month.
2.3 Government Securities
In October 2024, the Government raised a total of Shs. 2,565.6 billion from two Treasury Bill auctions and two Treasury Bond auctions. Shs. 610.8 billion was from T-Bills while Shs 1,954 .8 billion was from the T-Bond auctions. Shs. 692.2 billion was used for refinancing maturing treasury instruments, while the balance amounting to Shs. 1,873.5 billion was used for financing other items of the budget.
| Total Issuances | Financing other items in the Government budget | Refinancing | |
|---|---|---|---|
| Q1 2024/25 | 5,816.2 | 2,618.9 | 3,197.2 |
| October 2024 | 2,565.6 | 1,873.4 | 692.2 |
| FY 2024/25 to date | 8,381.8 | 4,492.4 | 3,889.4 |
2.4 Annualised Yields (Interest Rates) on Treasury Bills
Yields (interest rates) on Treasury Bills remained largely unchanged in October 2024. The annualized yields for the 364-day remained at 14.5 percent while the 182-day marginally increased to 14.5 percent from 14.4 percent in September 2024. On the other hand, the 91-day reduced to 10.8 percent from 11.1 percent registered in the previous month. All auctions for treasury bills remained oversubscribed with the average bid to cover ratio increasing to 1.8 in October 2024 from 1.75 recorded the previous month.
2.4.1 Yields on Treasury Bonds
Government issued six Treasury Bonds of 2-year, 3-year, 5-year, 10-year, 15-year and 20-year tenors during the month. Save for the 5-year tenor which remained at 16.00 percent, yields on Treasury Bonds slightly increased across all tenors issued compared to their previous issuance. Yields for the 2-year, 3-year, 10-year, 15-year and 20-year tenors increased to 15.75 percent, 15.50 percent, 16.25 percent ,16.75 percent, and 16.86 percent in October 2024 from 15.50 percent, 15.25 percent, 15.75 percent, 16.50 percent and 16.50 percent, respectively in September 2024.
2.5 Outstanding Private Sector Credit6
In September 2024, the stock of outstanding Private Sector Credit decreased by 0.3 percent to Shs 22,209.11 billion from Shs 22,284.81 billion in August 2024. Of this, Shs 15,861.87 billion was Shilling-denominated credit, while Shs 6,347.24 billion was foreign currency-denominated credit. The decline in the stock of Private Sector Credit was partly driven by higher repayments, which more than offset new disbursements.
It is worth noting that both the Shilling denominated and foreign currency denominated credit declined during the month. Particularly, the Shilling-denominated credit reduced from Shs 15,865.50 billion in August 2024 to Shs 15,861.87 billion in September 2024 while the foreign currency denominated credit reduced to Shs 6,347.24 billion from Shs 6,419.31 billion over the same period.
2.6 Credit Extensions7
The value of credit approved for disbursement increased by 7.9 percent to Shs 1,568.4 billion in September 2024 from Shs 1,453.6 billion the previous month. This increase was largely driven by higher demand from prime borrowers.
In September 2024, the value of approved credit was Shs 1,568.4 billion against applications valued at Shs 2,841.2 billion, reflecting an approval rate of 55.2 percent for the month.
Of the total credit extended to the private sector in September 2024, personal and household loans accounted for the largest share at 25.3 percent followed by trade, and agriculture at 19.4 percent and 16.6 percent, respectively.
3 External Sector Developments 8
3.1 Merchandise Trade Balance
On annual basis, the merchandise trade deficit increased by 26.5 percent, from USD 291.56 million in September 2023 to USD 368.84 million in September 2024. This was driven by a larger increase in the import bill, which outpaced the rise in export earnings during the period.
Similarly on monthly basis, the merchandise trade deficit with the rest of the world widened by 33.8 percent to USD 368.84 million in September 2024 from USD 275.67 million in August 2024. This was due to a decline in the export receipts, which more than offset the decrease in the import bill during the month.
3.2 Merchandise Exports 9
On annual basis, export earnings increased by 8.2 percent to USD 682.69 million in September 2024 from USD 631.17 million the same month the previous year. This was mainly due to increase in coffee prices during the year. Specifically, earnings from coffee exports increased by 53.3 percent from USD 94.39 million in September 2023 to USD 144.71 million in September 2024. This increase was driven by higher global coffee prices influenced by reduced supply of coffee from Brazil and Vietnam (the world’s largest producers of Arabica coffee and Robusta coffee).
Conversely, on a monthly basis, export earnings reduced by 14.1 percent to USD 682.69 million in September 2024 from USD 794.52 million in August 2024. This decline was mainly attributed to lower export earnings from coffee and mineral products, among others during the month.
Coffee export earnings declined by 34.7 percent to USD 144.71 million in September 2024, from USD 221.63 million in August 2024. This was due to a reduction in export volumes despite the increase in international coffee prices. The reduced export volumes were primarily due to lower coffee yields in the Greater Masaka and South-Western regions of Uganda, following the end of the main harvesting season.
Italy maintained the largest market for Uganda’s coffee exports, accounting for 36.2 percent of the total coffee exports in September 2024. Other significant markets included Germany (15.36 percent), India (8.6 percent), Belgium (6.73 percent) and Morocco (5.11 percent).
| Product | Sep-2023 | Aug-2024 | Sep-2024 |
Sep-2024 vs Sep-2023 % Change |
Sep-2024 vs Aug-2024 % Change |
|---|---|---|---|---|---|
| Total Exports | 631.17 | 794.52 | 682.69 | 8.16 | -14.08 |
| Coffee | |||||
| Value Exported | 94.39 | 221.63 | 144.71 | 53.32 | -34.71 |
| Volume Exported (Millions of 60 Kg Bags) | 0.58 | 0.84 | 0.53 | -7.77 | -36.48 |
| Average Unit Value (US$ per Kg of Coffee) | 2.73 | 4.41 | 4.53 | 66.24 | 2.8 |
| Non-Coffee Formal Exports | 489.01 | 523.04 | 483.92 | -1.04 | -7.48 |
| of which: | |||||
| Mineral Products | 225.27 | 306.51 | 271.83 | 20.67 | -11.32 |
| Cotton | 1.76 | 0.48 | 0.57 | -67.85 | 18.65 |
| Tea | 5.62 | 3.03 | 3.26 | -41.97 | 7.65 |
| Tobacco | 3.48 | 2.81 | 3.22 | -7.57 | 14.47 |
| Fish & Its Prod. (Excl. Regional) | 12.59 | 10.37 | 8.68 | -31.03 | -16.28 |
| Simsim | 1.82 | 2.35 | 1.99 | 9.15 | -15.35 |
| Maize | 15.06 | 3.68 | 7.84 | -47.93 | 113.2 |
| Beans | 4.73 | 1.93 | 1.44 | -69.56 | -25.49 |
| Flowers | 4.27 | 6.28 | 4.96 | 16.24 | -20.98 |
| ICBT Exports | 47.78 | 49.85 | 54.06 | 13.15 | 8.45 |
3.3 Destination of Exports10
The Middle East emerged as the biggest destination of Uganda’s exports, accounting for 36.4 percent of the total exports in September 2024. Within the Middle East, the United Arab Emirates was the top recipient, accounting for 97.6 percent of Uganda’s exports to the region.
Other notable destinations included the EAC and the European Union (EU), which accounted for 28.6 percent and 18.5 percent of total exports, respectively. Within the EAC, the Democratic Republic of the Congo, Kenya, and South Sudan were the largest markets, accounting for 34.7 percent, 24.8 percent, and 18.3 percent of the region’s exports, respectively. In the EU, Italy and Germany took the largest shares, taking up 47.2 percent and 21.6 percent of Uganda’s exports to the region, respectively.
3.4 Merchandise Imports11
In comparison to the same month the previous year, the import bill grew by 14.0 percent from USD 922.73 million in September 2023 to USD 1,051.53 million in September 2024. This growth was majorly attributed to higher import volumes for mineral products (excluding petroleum products); chemical & related products; vegetable products, animal, beverages, fats & oil; as well as plastics, rubber, & related products.
However, on monthly basis, the value of merchandise imports declined by 1.7 percent, from USD 1,070.19 million in August 2024 to USD 1,051.53 million in September 2024. This was mainly attributed to lower volumes of both Government project imports and formal private sector imports particularly; mineral products (excluding petroleum products); vegetable products, animal, beverages, fats & oil; wood & wood products, among others.
3.5 Origin of Imports
During the month of September 2024, Asia was the largest source of Uganda’s imports, accounting for 38.2 percent of the total imports. Within Asia, the major sources were China and India accounting for 47.5 percent and 27.7 percent of the total imports from the region, respectively.
Other notable sources of Uganda’s imports included the EAC at 25.1 percent, the Rest of Africa and the Middle East each at 13.8 percent of the total imports, respectively. Within the EAC, Tanzania was the leading source of Uganda’s imports, accounting for 65.2 percent followed by Kenya at 32.1 percent. Some of the key products imported from Tanzania include gold and rice, among others.
3.6 Trade Balance by Region
During the month of September 2024, Uganda recorded a trade surplus with both the Middle East and European Union amounting to USD 103.42 million and USD 53.61 million, respectively.
On the other hand, trade deficits were recorded with Asia (USD 324.79 million), Rest of Africa (USD 119.59 million), EAC (USD 68.88 million) and Rest of Europe at USD 1.30 million.
| Region | Sep 2023 | Aug 2024 | Sep 2024 |
|---|---|---|---|
| Middle East | -33.03 | 123.59 | 103.42 |
| European Union | 31.54 | 127.53 | 53.61 |
| Rest of Europe | -8.84 | 1.21 | -1.3 |
| EAC | 10.03 | -74.39 | -68.88 |
| Rest of Africa | -78.76 | -122.59 | -119.59 |
| Asia | -200.81 | -320.61 | -324.79 |
| Other Countries | -11.7 | -10.41 | -11.32 |
4 Fiscal Developments12
In October 2024, Government fiscal operations resulted in a net borrowing amounting to Shs. 1,024.99 billion, which was lower-than the planned Shs 1,994.78 billion. This variance primarily stemmed from lower-than-expected disbursements of externally financed projects. Overall, government operations for the month show that both expenses and net acquisition of non-financial assets were below their respective program targets.
| Shs Billion | Program | Outturn | Performance | Deviation |
|---|---|---|---|---|
| Revenues | 2,614.88 | 2,316.48 | 88.6% | -298.4 |
| Taxes | 2,132.41 | 2,078.01 | 97.4% | -54.4 |
| Grants | 322.08 | 63.75 | 19.8% | -258.33 |
| Project support | __ | __ | __ | 0 |
| Other revenue | 160.39 | 174.72 | 108.9% | 14.33 |
| Expense | 3,289.34 | 2,810.99 | 85.5% | -478.36 |
| Compensation of employees | 587.38 | 456.85 | 77.8% | -130.53 |
| Purchase of goods and services | 860.78 | 528.76 | 61.4% | -332.02 |
| Interest | 456.26 | 456.26 | 100.0% | 0 |
| o/w: domestic | 420.63 | 420.63 | 100.0% | 0 |
| o/w: foreign | 35.63 | 35.63 | 100.0% | 0 |
| Grants | 878.56 | 1,227.33 | 139.7% | 348.77 |
| o/w: local governments | 786.05 | 511.23 | 65.0% | -274.82 |
| Social benefits | 46.58 | 31.71 | 68.1% | -14.87 |
| Other expense | 459.79 | 110.08 | 23.9% | -349.71 |
| Gross operating balance | -674.46 | -494.51 | 73.3% | 179.95 |
| Net Acquisition of Nonfinancial Assets | 1,320.32 | 530.48 | 40.2% | -789.84 |
| Net lending/borrowing | -1,994.78 | -1,024.99 | __ | __ |
4.1 Revenue Performance
Preliminary numbers show that total revenue collections in the month of October 2024 amounted to Shs. 2,316.48 billion against the planned target of Shs. 2,614.88 billion registering a shortfall of Shs. 298.40 billion. This shortfall was largely driven by lower-than-anticipated performance of grants and tax revenue collections during the month.
Tax revenue collections for the month amounted to Shs 2,078.01 billion, representing a performance rate of 97.4% against the target of Shs 2,132.41 billion. This shortfall was mainly due to lower-than-expected collections from international trade and domestic trade of goods and services.
Specifically, a slow down in imports resulted into a shortfall in taxes on international trade amounting to Shs.22.30 billion. Additionally, taxes on goods and services registered a shortfall of Shs. 11.85 billion mainly due to slowdown in production and sales of beverages.
Nevertheless, other revenue collections surpassed projections recording a surplus of Shs.14.33 billion against the target of Shs 160.39 billion mainly driven by administrative improvements.
4.2 Expenses
Total Government expenses amounted to Shs. 2,810.99 billion against program of Shs. 3,289.34 billion. This lower-than planned spending was largely attributed to lower absorption of funds by Central Government votes.
There were delays in the payment of wages and salaries of the judiciary, health sector and prison services in October 2024 and as such, expense on compensation of employees was below target by Shs.130.53 billion.
Additionally, the purchase of goods and services, expenditure on social benefits and other expenses were below their respective targets by Shs. 332.02 billion, Shs. 14.87 billion and Shs. 349.71 billion respectively.
However, grants to other General Government units exceeded their target by Shs.348.77 billion. This performance was largely due to significant transfers for; national and community access roads maintenance as well as expenditure for human capital development under the education sector.
4.3 Net acquisition of non-financial assets
The net acquisition of non-financial assets during the month of October 2024, amounted to Shs. 530.43 billion which was lower-than the program of Shs.1,320.32 billion. This underperformance was largely due to limited capacity to absorb foreign disbursements by Ministries, Departments and Agencies.
5 East Africa Community Developments
5.1 EAC Inflation13
Annual headline inflation within majority of the EAC Partner States has been on a downward trend in October 2024. Just like Uganda, Kenya’s and Tanzania’s annual headline inflation declined and was recorded at 2.7 percent and 3.0 percent in October 2024, from 3.6 percent and 3.1 percent in the previous month, respectively. This reduction was partly driven by lower food prices and diesel & petrol prices owing to a decline in global crude oil prices during the period under review. Conversely, annual headline inflation in Rwanda increased from minus 0.8 percent to a positive 0.5 percent due to increased prices for transport, housing water, electricity, gas and other fuels.
Burundi’s annual headline inflation increased from 18.2 percent in August 2024 to 23.3 percent in September 2024, driven by higher prices for food and housing utilities. On the other hand, Somalia’s annual headline inflation declined from 5.9 percent to 5.3 percent over the same period, primarily due to lower prices for food & non-alcoholic beverages as well as tobacco & narcotics.
In South Sudan, headline inflation increased from 97.3 percent in June 2024 to 107.3 percent in July 2024, reflecting significant price increases for food and non-alcoholic beverages. Over the same period, D.R.C’s annual headline inflation decreased from 22.2 percent to 16.4 percent, largely due to a moderation in food prices.
5.2 EAC Exchange Rates14
In October 2024, local currencies within the EAC Partner States leaned mostly towards depreciation. The Tanzanian Shilling, Rwandan and Burundian Francs depreciated by 0.8 percent, 1.0 percent and 0.2 percent, respectively. These depreciations were on account of increased demand for the dollar which outpaced its supply across the states.
The Kenya Shilling remained unchanged, trading at an average mid-rate of KShs 129.2 per USD both in September and October 2024. The stability of the Kenyan Shilling was driven by increased foreign exchange inflows, prudent monetary policy measures and the effectiveness of exchange market reforms, such as Kenya Foreign Exchange Code (FX Code), and the Electronic Matching Systems (EMS) for interbank trading in the local foreign exchange market.
5.3 Trade Balance with EAC
In September 2024, Uganda traded at a deficit of USD 68.88 million with the rest of the EAC Partner States compared to a deficit of USD 74.39 million registered the previous month. The reduction in the deficit was majorly on account of a decline in the import bill which more than offset the drop in exports during the month.
Imports from the region decreased by 2.8 percent to USD 264.10 million in September 2024, down from USD 271.62 million the previous month. Exports to the region also declined by 1.0 percent from USD 197.23 million to USD 195.22 million over the same period.
On a country-specific level, Uganda traded at surpluses of USD 65.85 million, USD 31.86 million, USD 23.24 million and USD 6.01 million with DRC, South Sudan, Rwanda and Burundi, respectively. However, trade deficits were recorded with Tanzania and Kenya, amounting to USD 159.59 million and USD 36.25 million, respectively.
Year-on-year, Uganda’s trade position with the EAC shifted from a surplus of USD 10.0 million in September 2023 to a deficit of USD 68.9 million in September 2024. This shift was primarily due to increased imports from Tanzania (up by USD 36.59 million) and Kenya (up by USD 10.48 million).
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. |
| Non-Performing Loan | This is a sum of borrowed money upon which the debtor has not made scheduled payments for a period usually at least 90 days. |
| 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.
Data on Private Sector Credit, CIEA and External Sector has a lag of one month.↩︎
Data on inflation for Burundi, DRC, South Sudan and Somalia is available with a lag↩︎
Data on Exchange Rates for DRC, South Sudan and Somalia is available with a lag.↩︎
Readings above 50 indicates an improving outlook and below 50 a deteriorating outlook↩︎
Data comes with a month lag.↩︎
Data on Private Sector Credit has a lag of one month.↩︎
Data on credit extensions has a lag of one month.↩︎
Statistics on External Sector Developments come with a lag of one month.↩︎
Statistics on trade come with a lag of one month.↩︎
Other Countries include: Australia and Iceland.↩︎
Statistics on trade come with a lag of one month.↩︎
Fiscal data is preliminary.↩︎
Data for Burundi, South Sudan, D.R.C and Somalia is available with a lag.↩︎
Data for South Sudan, Somalia and DRC is available with a lag.↩︎