Log in
Free: The Observer Mobile App - Exclusive Content and Services

Uganda monthly earnings from Rwanda drop by 81%

Uganda’s monthly export earnings to Rwanda dropped by a whopping 81% in March as the impact of border closure becomes clear.

According to figures compiled by the Bank of Uganda (BOU), Uganda earned $2.64m (Shs 9.8bn) in March 2019, down from $14.51m (Shs 55bn) in February – a drop of $11.8m (Shs 44bn). 

Meanwhile, monthly earnings from Kenya jumped up, indication traders found an alternative as they wait for Kampala and Kigali to sort their issues. Uganda earned $26.4m in exports from Kenya up from $19m earned in February 2019. 

Rwanda accuses Uganda of supporting rebels that want to overthrow the Kigali administration. Uganda has dismissed the accusations as untrue. They consequently closed the Kyanika and Katuna border posts and stopped their citizens from crossing into Uganda.

Last month, BOU warned that the projected growth might take an unprecedented nosedive as a result of Uganda's tensions with Rwanda, declining exports, and the trade impasse between USA and China and Britain's uncertainty over leaving the European Union bloc.  BOU governor Emmanuel Tumusiime-Mutebile told reporters then that "unresolved trade tensions" were now a big threat to projected growth.    

"Economic activity pointed to a slight moderation in the first quarter of 2019. Elevated political and policy uncertainty in the global economy…could weigh further on the global and consequently Uganda's economy," said Mutebile.

The impact is getting visible with fewer earnings from Rwanda. The central bank had, however, indicated that the Rwanda impact would not hurt much on the economy. It indicated it could only cut growth by a paltry 0.2%, which is minimal.  “The diplomatic spat between Uganda and Rwanda is assumed to be temporary,” Bank of Uganda said in a report last month.

Uganda exports mainly foodstuffs, fuel, and other light manufactured goods to Rwanda. The bigger impact on the Ugandan economy will be if China and the USA fail to resolve their differences and Britain’s exit from Europe takes forever.  

This is partly because these countries are the source of Uganda’s loans for infrastructure projects especially China, budget support aid, and much of the diaspora remittances that are key to the country’s growth.  

On the other hand, Rwanda’s earnings from exporting to Uganda remained stable, oscillating around $1.48 in January 2019, $0.75m in February, and $1.67m in March 2019. Uganda exported goods worth up to $212 million (Shs 783bn) last year to Rwanda, which earned $18 million (Shs 66bn) in 2018 from Kampala, BOU filings show.


0 #1 Rwasubutare 2019-05-11 20:14
Politics of lies, which some call tactful, can hurt indeed.

Many businesses are going to suffer and the blame should b placed squarely where it belongs.............
Report to administrator
-1 #2 Winner 2019-05-11 20:53
All should be good very soon. Both presidents are brothers.
Report to administrator
0 #3 Lysol 2019-05-11 21:37
The :pencil net boy and his mentor, the big old bully should stop playing that game.

The question is who will still be standing at the end of all these? Who is fooling whom here, and calling the bluff? Get it over with!
Report to administrator
0 #4 alfonse 2019-05-12 00:04
EAC should fix this problem asap. small business men are hurting especially near borders.

how it affects the country as a whole is not as important as families who are suffering day by day and end never comes near.
Report to administrator

Comments are now closed for this entry