November 2024
Performance of the Economy Report
Ministry of Finance, Planning and Economic Development
2024-12-19
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, as reflected by the high-frequency indicators such as the Composite Index of Economic Activity (CIEA) and the Purchasing Managers’ Index (PMI). The CIEA registered a growth of 0.4% in October 2024, rising to 168.74 from 168.08 in September, with heightened activity across all monitored sectors. Similarly, the PMI rose to 55.7 in November 2024 from 52.9 in October, driven by increased output and new orders fueled by sustained strong consumer demand.
Similarly, perceptions about doing business remained optimistic as measured by the Business Tendency Index (BTI). The BTI increased to 59.63 in November 2024, from 57.99 in October, partly due to consistent higher consumer demand within the business community.
In November 2024, Annual Headline inflation remained unchanged at 2.9%, the same rate recorded in October. This stability is attributed to declines in prices for transport services, inpatient care services and liquid fuels (petrol and diesel), which offset the increase in prices of food items such as milk and irish potatoes.
Financial Sector
The Ugandan Shilling has largely been on an appreciating trend since March 2024, with the exception of November. In November 2024, the Ugandan Shilling slightly depreciated by 0.3% against the US Dollar, trading at an average midrate of Shs. 3,678.6 per US$ compared to an average midrate of Shs. 3,667.9 per US$ the previous month. This was largely on account of strong corporate and interbank demand for the Dollar which outweighed the inflows mainly from coffee exports and remittances.
The Central Bank Rate (CBR) remained unchanged at 9.75% in November following its downward revision the previous month. The Central Bank opined that this rate would be adequate to contain inflation around the medium-term target of 5%.
The weighted average lending rates for Shilling-denominated credit increased to 19.43% in October 2024 from 18.84% in September 2024. This was partly due to higher yields on Government securities and an increase in consumer demand as the economy continues to recover.
In October 2024, the stock of outstanding private sector credit increased by 0.3%, from Shs. 22,209.11 billion in September 2024 to Shs. 22,270.87 billion in October 2024. Both Shilling and foreign currency denominated credit recorded an increase in the stock of credit.
In November 2024, Government raised a total of Shs. 1,080.7 billion through the issuance of treasury instruments, with Shs. 414.8 billion from T-Bills and Shs. 665.8 billion from the T-Bonds auction.
Yields (interest rates) on Treasury Bills edged upwards for all tenors i.e. 91-day, 182-day and 364 day tenors at 11.6%, 13.6%, and 14.9% in November 2024, from 10.8%, 13.4% and 14.5% in October 2024, respectively.
Likewise, yields edged upwards for all bonds with the 3-year, 10-year and 20-year tenor bonds increasing to 15.80%, 16.50% and 17.50% in November from 15.50%, 16.25% and 16.86% respectively.
External Sector
On an annual basis, Uganda’s export earnings grew by 9.5% from USD 680.51 million in October 2023 to USD 744.86 million in October 2024. This increase was driven by higher earnings from coffee, which rose by 76.1%, and mineral products, which grew by 21.5%. On a monthly basis, export earnings in October 2024 increased by 9.1% to USD 744.86 million, up from USD 682.69 million in September 2024. This growth was fueled by higher earnings from mineral products, tea, tobacco, fish and its products among others.
The value of merchandise imports grew by 47.2% from USD 869.13 million in October 2023 to USD 1,279.52 million in October 2024, majorly on account of higher private sector non-oil imports particularly machinery equipment, vehicles and accessories, mineral products, base metals among others. On a month-to-month basis, imports increased by 21.7% from USD 1,051.53 million in September 2024 to USD 1,279.52 million in October 2024.
Consequently, the merchandise trade deficit widened significantly with the rest of the world on both an annual (183%) and monthly (45%) basis. The merchandise trade deficit rose from USD 188.61 million in October 2023 to USD 534.66 million in October 2024. In the same manner, the merchandise deficit with the rest of the world increased from USD 368.34 million in September to USD 534.66 million in October 2024.
Fiscal Sector
Government fiscal operations in November 2024 resulted in a net borrowing of Shs.1,344.86 billion, which was lower than the planned Shs.1,696.50 billion. This was mainly due to lower than expected government expenditure on externally financed projects activities. 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 November 2024 amounted to Shs.2,670.64 billion against the planned target of Shs.2,640.97 billion registering a surplus of Shs.29.67 billion. This surplus was primarily attributed to grants disbursements which exceeded their respective target by Shs. 61.93 billion.
Total Government expenses amounted to Shs. 3,514.43 billion against program of Shs. 3,657.55 billion. This lower than expected spending was largely attributed to lower than planned spending under compensation of employees and other expense.
The net acquisition of non-financial assets during the month of November 2024, amounted to Shs. 501.08 billion which was lower-than the program of Shs. 679.92 billion. This underperformance was primarily attributed to lower than projected loan disbursements for Road infrastructure projects.
In October, Uganda recorded a trade deficit of USD 82.54 million with EAC Partner States, up from USD 68.88 million in the previous month. The widening of the deficit was driven the 5.4% increase in imports.
During the period under review, majority of the EAC currencies depreciated against the US dollar, with the Rwandan Franc registering the biggest loss against the US dollar at 1.03%. Additionally, the Burundian Franc, Kenyan Shilling, and Ugandan Shilling weakened by 0.16%, 0.15%, and 0.3%, respectively. The Tanzanian Shilling, however, strengthened by 2.5%.
Inflation picked up across the other EAC partner states, but remained unchanged for Uganda (2.9%) and Tanzania (3%) in November 2024. Annual inflation in Kenya and Rwanda increased to 2.8% and 3.4% from 2.7%, and 0.5% respectively. Burundi and Somalia’s annual headline inflation, which is reported with a month’s lag, also increased to 24.9% and 5.83% in October from 23.3% and 5.3% in September 2024.
1 Real Sector Developments
1.1 Inflation
Annual headline inflation remained unchanged at 2.9% in November 2024, the same rate recorded in October. This stability was due to declines in prices for transport services, inpatient care services, and liquid fuels (petrol and diesel), which offset the increase in prices of some food items such as milk and irish potatoes.
Annual Core inflation slightly decreased to 3.8% in November 2024, from 3.9% registered the previous month mainly on account of a decrease in prices of transport services, and inpatient care services. In particular, prices reduced for taxi services (both short and medium distances), school transport services, domestic flights services, consultation and hospitalization services in November 2024 compared to the same month last year. On the other hand, Other Goods inflation increased slightly to 2.2% in November, from 2.1% in October 2024 largely on account of an increase in prices of Meat(beef), goats’ meat, fresh tilapia fish, maize flour, refined oil and domestic beer(bottled).
In the same manner, annual Energy, Fuels and Utilities (EFU) inflation dropped to 2.2% in November 2024 down from 3.3% in October. This was on account of a reduction in Liquid Energy fuels inflation from -5.4% in October 2024, to -7.8% in November 2024 as prices of petrol and diesel dipped to Shs 5,105 per liter and Shs 4,691 in November 2024 down from Shs 5,564 per liter and Shs 5,075 in November 2023.
Prices of food crops and related items continued to decline in November 2024, although at a slower rate when compared to the previous month. Annual foods and related items inflation was recorded at -4.0% in November 2024 from -5.3% the previous month. Prices of matooke, red onions and beans continued to decline despite an increase in the prices of milk and irish potatoes.
1.2 Economic Activity
November 2024 was characterized by growth in economic activity supported by higher consumer demand which boosted confidence in business conditions as indicated by the high frequency indicators of economic activity.
The Composite Index of Economic Activity (CIEA) has consistently registered an upward trend since the beginning of the Fiscal Year 2024/25 signaling increased economic activity month on month. The CIEA increased to 168.74 in October 2024 from 168.08 recorded the previous month. All monitored sectors i.e. agriculture, manufacturing, construction and wholesale and retail trade registered increased activity during the month of October
The Purchasing Manager’s Index (PMI) continued to indicate growth in business activity by remaining above the 50-mark threshold since April 2024 as shown in Figure 4. The PMI increased to 55.7 in November 2024 from 52.9 recorded the previous month owing to higher output and new orders on account of sustained higher consumer demand. Input costs continued to increase stemming mainly from higher energy and utilities bills.
Despite an increase in input costs and a drop in employment, the sustained demand conditions enabled firms to increase their output and sales during the month. Employment dropped for the first time since March 2024 as employees sought for higher wages. Growth in output and new orders was registered in all the monitored sectors.
1.2.1 Business Perceptions4
The Business Tendency Index remained above the 50-mark threshold indicating optimism about business conditions among the private sector players. The BTI increased to 59.63 in November 2024 from 57.99 recorded the previous month, showing increased confidence about the business conditions and outlook partly due to the consistent higher consumer demand. At sectoral level, optimism was registered in all the monitored sectors.
2 Financial Sector Developments
2.1 Exchange Rate Movements
The Ugandan Shilling registered a slight depreciation against the US Dollar in November 2024 after registering consecutive gains in the previous two months. On average, the Shilling depreciated by 0.3% in November 2024, recording an average midrate of Shs. 3,678.6 per US$ up from Shs. 3,667.9 per US$ in October 2024. The loss was on account of strong corporate and interbank demand for the Dollar which outweighed the inflows mainly from coffee exports and remittances.
The Shilling however continued to gain against the British Pound Sterling and the Euro for the third month running. On average, the Shilling appreciated by 2.2% and 2.0% against the Euro and British Pound Sterling in November 2024, respectively.
2.2 Interest Rate Movements
In November, the Central Bank Rate (CBR) was maintained at 9.75% as agreed by the Monetary Policy Committee.
The committee considered that the prevailing monetary policy stance was sufficient to keep inflation around its medium-term target of 5% while supporting economic stability to encourage saving, investment, sustainable economic growth and Uganda’s social economic transformation.
2.2.1 Lending Rates5
Commercial banks’ shilling denominated lending rates increased to a weighted average of 19.43% in October 2024 from 18.84.% in September 2024. This was partly due to higher yields on Government securities and an increase in consumer demand as the economy continues to recover.
On the other hand, foreign currency denominated lending rates slightly reduced from a weighted average of 8.79% to 8.63% over the same period.
2.3 Government Securities
In November 2024, the government secured Shs. 1,080.7 billion from three auctions (2 T-Bills, 1 T-Bond). Of the total amount raised, Shs. 414.8 billion was from T-Bills while Shs. 665.8 billion was from the T-Bond auction. A total of Shs. 646.3 billion was used for refinancing maturing securities while Shs. 434.4 billion was used to finance other items in the budget.
| Total Issuances | Financing other items in the Government budget | Refinancing | |
|---|---|---|---|
| FY 2023/24 | 15,021.3 | 6,662.8 | 8,358.5 |
| Q1 2024/25 | 5,816.2 | 2,618.9 | 3,197.2 |
| October 2024 | 2,565.6 | 1,873.4 | 692.2 |
| November 2024 | 1,080.6 | 434.4 | 646.3 |
| FY 2024/25 to date | 9,462.4 | 4,926.7 | 4,535.7 |
2.4 Annualised Yields (Interest Rates) on Treasury Bills
Yields (interest rates) on Treasury Bills slightly edged upwards for the 91-day, 182-day and 364 day tenors at 11.6%, 13.6%, and 14.9% in November 2024, from 10.8%, 13.4% and 14.5% in October 2024, respectively.
All auctions for Treasury Bills were oversubscribed, with the average bid to cover ratio recorded at 1.3 in November 2024.
2.4.1 Yields on Treasury Bonds
Government re-opened 3-year, 10-year and 20-year tenor bonds on the primary securities market. Yields edged upwards for all bonds in comparison to the previous issuance of similar securities. The yields for the 3-year, 10-year and 20-year tenor bonds increased to 15.80%, 16.50% and 17.50% from 15.50%, 16.25% and 16.86% respectively. The rise in yields during the month is partly due to the increased borrowing requirement by Government.
2.5 Outstanding Private Sector Credit6
In October 2024, the stock of outstanding private sector credit increased by 0.3%, from Shs. 22,209.11 billion in September 2024 to Shs. 22,270.87 billion in October 2024. This growth was driven by a rise in both the Shilling and foreign currency denominated credit. The Shilling-denominated credit increased from Shs. 15,861.87 billion in September 2024 to Shs. 15,875.28 billion in October 2024. The slight rise in Shilling-denominated credit is attributed to higher lending to the agriculture sector which offset declines in the Transport and Housing sector.
Likewise, the foreign currency denominated credit increased from Shs. 6,347.24 billion in September 2024 to Shs. 6,395.59 billion in October 2024.
2.6 Credit Extensions7
The value of credit approved marginally increased from Shs. 1,568.38 billion in September 2024 to Shs. 1,589.15 billion in October 2024 driven by higher approvals in the Business Services sector as firms secured working capital for the festive season. The rate of loan approval also significantly improved from 55.2% in September 2024 to 75.4% in October 2024.
Just like in the previous month, Personal Loans and Household loans accounted for the largest share of total credit approved for lending in October 2024, comprising 28.0% of the total. This was followed by Business, Community Social and Other Services at 16%, Trade at 15.6%, Building, Construction, and Real estate at 14.5%, and Manufacturing sector at 13.3%.
3 External Sector Developments 8
3.1 Merchandise Trade Balance
On an annual basis, the merchandise trade deficit widened by more than 180 percent, rising from USD 188.61 million in October 2023 to USD 534.66 million in October 2024. This surge was driven by a rise of imports from USD 869.13 million in October 2023 to USD 1,279.52 million in October 2024. This increase surpassed that of export receipts, which rose from USD 680.51 million in October 2023 to USD 744.86 million in October 2024.
Similarly in October 2024, Uganda’s merchandise deficit with the rest of the world increased by 45.0 percent from USD 368.34 million in September to USD 534.66 million in October. The widening of the deficit was attributed to an increase in the import bill, which more than offset the increase in export receipts during the month.
3.2 Merchandise Exports 9
In comparison with the same month last year, export earnings in Uganda grew by 9.5 percent from USD 682.70 million in October 2023 to USD 744.86 million in October 2024, largely due to increased earnings from coffee and mineral products which rose by 76.1 percent and 21.5 percent respectively. The spike in earnings from coffee was largely driven by higher global coffee prices influenced by reduced supply of coffee from Brazil and Vietnam (the world’s largest producers of Arabica and Robusta coffee). The increase in exports was also attributed to higher earnings from electricity, tobacco, flowers and oil re-exports among others.
On a monthly basis, export earnings in October 2024 amounted to USD 744.86 million, a 9.1 percent increase from USD 682.69 million in September 2024. This growth was primarily driven by higher earnings from mineral products, tea, tobacco, fish and its products, hides and skins, simsim, beans, and oil re-exports. Similarly, exports excluding coffee and mineral products increased by 8.2 percent from USD 266.15 million to USD 288.05 million, signaling a rise for majority of our exports in October 2024.
Coffee export earnings declined for the month under review by 3.9 percent to USD 139.05 million from USD 144.71 million the previous month. This was due to a reduction in export volumes despite the increase in global coffee prices. Exports were lower due to the bi-annual off-season cycle coupled with poor flowering in the Mt. Elgon region.
Italy remained the largest market for Uganda’s coffee exports, accounting for 37.4 percent of the total coffee exports in October 2024. Other significant markets included Germany (17.5 percent), India (9.4 percent), Algeria (4.91 percent) and Morocco (4.5 percent).
| Product | Oct-2023 | Sep-2024 | Oct-2024 |
Oct-2024 vs Oct-2023 % Change |
Oct-2024 vs Sep-2024 % Change |
|---|---|---|---|---|---|
| Total Exports | 680.51 | 682.69 | 744.86 | 9.46 | 9.11 |
| Coffee | |||||
| Value Exported | 78.96 | 144.71 | 139.05 | 76.09 | -3.91 |
| Volume Exported (Millions of 60 Kg Bags) | 0.47 | 0.53 | NA | NA | NA |
| Average Unit Value (US$ per Kg of Coffee) | 2.8 | 4.53 | NA | NA | NA |
| Non-Coffee Formal Exports | 561.08 | 483.92 | 555.27 | -1.03 | 14.74 |
| of which: | |||||
| Mineral Products | 261.51 | 271.83 | 317.76 | 21.51 | 16.9 |
| Cotton | 0.39 | 0.57 | 0.04 | -89.75 | -93.02 |
| Tea | 6.88 | 3.26 | 4.49 | -34.83 | 37.55 |
| Tobacco | 6.53 | 3.22 | 7.17 | 9.82 | 123.07 |
| Fish & Its Prod. (Excl. Regional) | 14.29 | 8.68 | 13.14 | -8.08 | 51.28 |
| Simsim | 3.08 | 1.99 | 2.07 | -32.61 | 4.08 |
| Maize | 21.3 | 7.84 | 6.03 | -71.68 | -23.09 |
| Beans | 4.35 | 1.44 | 2.41 | -44.65 | 67.47 |
| Flowers | 4.17 | 4.96 | 4.56 | 9.32 | -8.17 |
| ICBT Exports | 40.47 | 54.06 | 50.54 | 24.88 | -6.5 |
3.3 Destination of Exports10
The Middle East emerged as the biggest destination of Uganda’s exports, accounting for 38.3 percent of the total exports in October 2024. Within the Middle East, the United Arab Emirates accounted for 97.8 percent of Uganda’s exports to the region.
Other notable destinations for Uganda’s exports were the EAC, the European Union and Asia, which accounted for 26.6 percent, 15.4 percent and 14.5 percent of the regions exports respectively. Within the European Union, Italy and Germany took the largest share, accounting for 50.5 percent and 24.9 percent of exports to the region respectively.
3.4 Merchandise Imports11
The value of merchandise imports year on year grew by 47.2 percent from USD 869.13 million in October 2023 to USD 1,279.52 million in October 2024. This growth was majorly attributed to higher private sector non-oil imports of machinery equipments, vehicles and accessories, mineral products, base metals and their products, vegetable products, animal, beverages, fats and oils among others.
Similarly on a month-to-month basis, imports increased by 21.7 percent from USD 1,051.53 million in September 2024 to USD 1,279.52 million in October 2024. This was mainly attributed to higher volumes of formal private sector non-oil oil imports such as machinery equipments, vehicles and accessories, base metals and their products, mineral products, among others.
3.5 Origin of Imports
Asia maintained its position as the largest source of Uganda’s imports in October 2024, accounting for 43.9 percent of the total imports. Within Asia, the major sources were China, India and Japan accounting for 51.3 percent, 24.7 percent and 9.0 percent of our imports from the region respectively.
Other notable sources of Uganda’s imports included the EAC, Rest of Africa and the Middle East accounting for 21.8 percent, 12.7 percent and 11.8 percent respectively.
In comparison to October 2023, Asia remained as the largest source of Uganda’s imports. The share of imports from Asia and Rest of Africa increased from 40.7 percent and 10.9 percent to 43.7 percent and 13.8 percent in October 2024 respectively. The share of imports from EAC and the Middle East reduced from 25.6 percent and 14.4 percent to 21.7 percent and 11.8 percent October 2024, respectively.
3.6 Trade Balance by Region
During October 2024, Uganda recorded a trade surplus with the Middle East and the European Union amounting to USD 130.49 million and USD 33.82 million, respectively.
On the other hand, trade deficits were recorded with Asia, the Rest of Africa, the Rest of Europe and the EAC worth USD 455.33 million, USD 150.47 million, USD 5.08 million and USD 82.54 million respectively.
| Region | Oct 2023 | Sep 2024 | Oct 2024 |
|---|---|---|---|
| Middle East | 58.98 | 103.42 | 130.49 |
| European Union | 23.08 | 53.61 | 33.82 |
| Rest of Europe | 1.35 | -1.3 | -5.08 |
| EAC | 51.92 | -68.88 | -82.54 |
| Rest of Africa | -70.21 | -119.59 | -150.47 |
| Asia | -241.16 | -324.79 | -455.33 |
| Other Countries | -12.59 | -11.32 | -15.55 |
4 Fiscal Developments12
Government fiscal operations for November 2024, resulted in a net borrowing amounting to Shs.1,344.86 billion which was lower than the target of Shs.1,696.50 billion. This variance was primarily due to lower than expected government expenditure on externally financed projects activities. The table below shows the summary of fiscal operations for November 2024.
| Shs Billion | Program | Outturn | Performance | Deviation |
|---|---|---|---|---|
| Revenues | 2,640.97 | 2,670.64 | 101.1% | 29.67 |
| Taxes | 2,233.81 | 2,219.76 | 99.4% | -14.05 |
| Grants | 220.73 | 282.66 | 128.1% | 61.93 |
| Project support | 220.73 | 282.66 | 128.1% | 61.93 |
| Other revenue | 186.43 | 168.22 | 90.2% | -18.21 |
| Expense | 3,657.55 | 3,514.43 | 96.1% | -143.12 |
| Compensation of employees | 544.6 | 426.31 | 78.3% | -118.29 |
| Purchase of goods and services | 670.13 | 810.49 | 120.9% | 140.36 |
| Interest | 1,196.48 | 1,194.54 | 99.8% | -1.94 |
| o/w: domestic | 1,145.01 | 1,143.06 | 99.8% | -1.95 |
| o/w: foreign | 51.48 | 51.48 | 100.0% | 0 |
| Grants | 709.86 | 909.93 | 128.2% | 200.07 |
| o/w: local governments | 611.15 | 511.23 | 83.7% | -99.92 |
| Social benefits | 19.28 | 66.01 | 342.4% | 46.73 |
| Other expense | 517.2 | 107.16 | 20.7% | -410.04 |
| Gross operating balance | -1,016.59 | -843.79 | 83.0% | 172.8 |
| Net Acquisition of Nonfinancial Assets | 679.92 | 501.08 | 73.7% | -178.84 |
| Net lending/borrowing | -1,696.5 | -1,344.86 | __ | __ |
4.1 Revenue Performance
In November 2024, total revenue collections amounted to Shs. 2,670.64 billion translating into a performance rate of 101.1%. The collections exceeded the month’s target of Shs. 2,640.97 billion by Shs. 29.67 billion. This surplus was primarily attributed to grants disbursements which exceeded their respective target by Shs 61.93 billion.
Tax revenue collections for November 2024, amounted to Shs. 2,219.76 billion against the target for the month of Shs. 2,233.81 billion implying a Shs. 14.05 billion shortfall. This was mainly due to lower than projected collections under taxes on international trade and taxes on goods and services.
The shortfall in taxes on international trade was mainly recorded under import duty and Value Added Tax as importation of electrical machinery, secondhand clothes and cars slowed down.
Similarly, the shortfall in taxes on goods and services was primarily due to shortfalls in excise duty and Value Added Tax of Shs. 8.15 billion and Shs. 22.99 billion respectively. These shortfalls were mainly recorded on sales of beer, soft drinks, phone talk time and wholesale and retail trade.
However, taxes on income, profits and capital gain registered a surplus of Shs. 71.40 billion. This surplus was mainly attributed to overperformance in corporate tax and taxes on treasury bills which amounted to Shs. 35.92 billion and Shs. 26.79 billion respectively. This performance was mainly due to improvement in administrative measures.
In November 2024, grant disbursements totalled Shs. 282.66 billion, surpassing the target by Shs. 61.93 billion. This overperformance was largely attributed to higher than programmed disbursement for the humanitarian project focused on constructing roads and bridges in refugee-hosting districts. Whereas the project was programmed to receive Shs. 118.82 billion for the entire financial year, Shs. 189.78 billion was disbursed in November 2024 following fulfillment of the pre-conditions for disbursement.
4.2 Expenses
Total government expenses in November 2024 amounted to Shs. 3,514.43 billion which was lower than the program target of Shs. 3,657.55 billion by shs. 143.13 billion. This lower than expected spending was largely attributed to lower than planned spending under compensation of employees and other expense.
The lower than planned spending in the compensation of employees was largely attributed to delays in the payment of wages and salaries across various Ministries, Departments and Agencies (MDAs). These payments are expected to materialise in December 2024.
Additionally, the lower than program target spending under other expense category was largely attributed to front loading of expenses by government agencies in the month of October 2024.
However, Grants to Other General Government and Purchase of Goods and Services exceeded their targets by Shs. 200.07 billion and shs.140.36 billion respectively. The higher-than-target spending under Purchase of Goods and Services was primarily attributed to payments initially made in October 2024 but spilled over to November 2024. Grants amounting to Shs. 511.23 was disbursed to local governments for service delivery.
4.3 Net acquisition of non-financial assets
In November 2024, the net acquisition of nonfinancial assets amounted to Shs. 501.08 billion, below the program target of Shs. 679.92 billion. This underperformance was primarily attributed to lower than projected loan disbursements for Road infrastructure projects, for example Busega-Mpigi express Highway, Namagumba-Budadiri road etc.
5 East Africa Community Developments
5.1 EAC Inflation13
Except for Uganda and Tanzania where inflation remained unchanged at 2.9% and 3% respectively, inflation accelerated across the other EAC partner states during the period under review. In Kenya, annual headline inflation rose to 2.8% in November 2024, up from 2.7% in October 2024, driven primarily by increased prices of food, non-alcoholic beverages, housing, and utilities. Similarly, Rwanda’s annual headline inflation surged to 3.4% in November 2024, up from 0.5% in October 2024. This increase was primarily driven by rising prices for alcoholic beverages, housing, water, electricity, gas, and other fuels.
Additionally, Annual headline inflation for Burundi and Somalia rose in October when compared to September 2024. Burundi’s annual headline inflation remained at double digit increasing to 24.9 in October down from 23.3% the previous month, attributed to rising housing and transportation costs.
In Somalia, annual headline inflation rose from 5.33% in September to 5.83% in October, with significant price hikes for communication (telephone and telefax equipment), hotels and restaurants, and transportation.
5.2 EAC Exchange Rates14
During the review month, the currencies within the EAC depreciated against the US$, save for the Tanzanian Shilling that strengthened by 2.5%. The Burundi and Rwanda Francs depreciated by 0.16% and 1.03% respectively. Similarly, the Kenyan and Ugandan Shillings depreciated by 0.15% and 0.3% respectively.
5.3 Trade Balance with EAC
In October 2024, Uganda traded at a deficit of USD 82.54 million with the EAC Partner States, compared to the USD 68.88 million deficit recorded last month. This was driven by the 5.4 percent increase in imports.
On a country specific level, Uganda traded at a surplus with DRC, South Sudan, Rwanda and Burundi worth USD 56.33 million, USD 37.64 million, USD 20.84 million and USD 6.51 million in October 2024 respectively. However, deficits were recorded with Tanzania and Kenya, amounting to USD 168.42 million and USD 35.44 million, respectively.
Year-on-year, Uganda’s trade position with the EAC shifted from a surplus of USD 51.92 million in October 2023 to a deficit of USD 82.54 million in October 2024. This shift was driven by a concurrent increase in imports by USD 56.05 million and a fall in exports by USD 78.41 million. Imports from Kenya and Tanzania accounted for the increase in the import bill from the region while our decrease in exports to all EAC partner states accounted for the fall in our export receipts from the region.
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.↩︎