The United Arab Emirates (UAE) has surpassed Kenya as Uganda’s largest export market, according to data from the Bank of Uganda (BoU).
The BoU reports that Kenya dropped to third place among Uganda’s top export destinations, with UAE taking the lead and India moving to second place.
Uganda’s exports to Kenya have grown from $214.5 million (Sh27.6 billion) fourteen years ago to $626.7 million (Sh80.7 billion), according to the most recent data.
On average, Uganda has been the destination for almost 50 per cent of Kenyan exports and is the source of 60 per cent of Kenyan imports from the region since 2015. Goods exports and imports reached $1.4 billion and $620 million, respectively, as of 2019.
However, trade between Uganda and Kenya has been constrained by various regulatory challenges and non-tariff barriers, impacting the seamless flow of goods across the two nations.
In 2023, the UAE contributed $2.03 billion (Sh261.7 billion) to Uganda’s export earnings, representing 25.6 per cent of Uganda’s total export share. India followed with 12.92 per cent, contributing $951.8 million (Sh122.7 billion), while Kenya accounted for 8.51 per cent with earnings of $626.7 million (Sh80.7 billion).
Traditionally, Uganda exports a variety of agricultural goods to Kenya, including dairy products, sugar, maize, beans, and oil seeds. However, several Ugandan exports, particularly poultry, dairy, and sugar, faced import restrictions and blockades from Kenya over the past year, further hampering trade between the two countries.
According to the United Nations COMTRADE database on international trade, Kenya’s exports to Uganda in 2023 amounted to $896.6 million (Sh115.5 billion).
Key exports included iron and steel products, valued at Sh7.39 billion, and petroleum products at Sh5 billion. Other significant exports included salt, sulfur, cement, and related materials, totaling $148.16 million (Sh19 billion).
Kenya’s total exports in the first quarter of 2024 grew by 28 per cent rising from Sh 232.7 billion in the first quarter of 2023. Africa remained the largest market for Kenya’s exports accounting for 38.3 per cent of total export earnings in the quarter under review. This was supported by increase in exports to Egypt (45.7%), Democratic Republic of Congo (56.0%), Tanzania (18.0%), Uganda (7.4%) and South Sudan (25.7%).
Notably, there was increased domestic exports of tea to Egypt; wheat flour to Democratic Republic of Congo; carboys, bottles, flasks and similar articles to Uganda; household or laundry-type washing machines to South Sudan; and re-exports of kerosene type jet fuel to Tanzania.
During the first quarter of 2024, revenue from exports to Asia were valued at Sh42.7 billion, representing an increase of 76.4 per cent from the first quarter of 2023. Over the past five years, Kenya’s exports to Uganda have grown at an annualized rate of 2.78 per cent, increasing from $591 million (Sh76.1 billion) in 2017 to $677 million (Sh87.2 billion) in 2022. However, despite this growth, Uganda’s trade focus has shifted toward other markets, particularly due to the rise of gold exports.
Uganda’s strong export performance to the UAE and India is largely driven by gold, which has become a major export commodity. In 2023, gold accounted for 41.9% of Uganda’s export earnings, generating $3.09 billion (Sh398.3 billion). Uganda’s exports to the UAE have seen impressive growth, with an annualized increase of 5.29% over the past fourteen years, from $254.1 million (Sh32.7 billion) in 2011 to $2.03 billion (Sh261.7 billion) in 2023. This growth is part of a broader trend in Uganda’s export landscape, as total export earnings rose by 66.8 per cent to $7.3 billion (Sh941.1 billion) by June 30, 2024, up from $4.91 billion (Sh632.9 billion) in the previous year.
Reflecting on this shift, John Lwere, an export executive at the Uganda Export Promotion Board, noted, “The trend started last year; otherwise, Kenya would have taken the second position.”
