Uganda’s trade deficit with the East African Community (EAC) widened to 809 million US dollars in August 2026, as imports from Kenya and Tanzania far outstripped exports, according to data compiled by the Uganda Development Bank (UDB) research department.
Uganda earned 241.29 million dollars from exports to the regional bloc, while imports amounted to 1.05 billion dollars, leaving the country with a substantial trade imbalance despite surpluses recorded with the Democratic Republic of Congo (DRC), South Sudan and Rwanda.
The regional deficit contributed to a broader deterioration in Uganda’s merchandise trade balance. The overall deficit widened by 263.5 per cent from July to 817.03 million dollars in August, as imports grew much faster than exports.
Export earnings increased by 6.4 per cent to 1.5 billion dollars, while imports surged by 42 per cent to 2.31 billion dollars.
Despite the widening deficit, Uganda’s terms-of-trade index improved by 1.5 per cent, from 125.23 in July to 127.16 in August, indicating that export prices strengthened relative to import prices.
The worsening trade balance comes amid pressure on the Uganda shilling, which the Bank of Uganda has partly linked to the country’s external imbalances and other macroeconomic pressures.
The depreciation has also raised concerns about imported inflation as the cost of foreign goods and inputs rises.
Kenya accounted for the largest share of Uganda’s imports from the EAC, with purchases valued at approximately 714.5 million dollars, compared with exports worth 41.05 million dollars.
This left Uganda with a bilateral trade deficit of about 673.45 million dollars. Kenya accounted for approximately 68 per cent of Uganda’s total imports from the regional bloc, making it the country’s largest source of EAC imports.
Tanzania was the second-largest source, supplying goods worth 203.6 million dollars, equivalent to about 19.4 per cent of Uganda’s regional imports.
Uganda’s exports to Tanzania amounted to only 13.8 million dollars, resulting in a trade deficit of 189.8 million dollars.
The deficits with Kenya and Tanzania, alongside the imbalance with Burundi, outweighed Uganda’s trade surpluses with other EAC partners.
The DRC remained Uganda’s largest export market within the bloc and generated the country’s biggest bilateral trade surplus in August.
Exports to the DRC were valued at 84.3 million dollars, while imports amounted to 7.21 million dollars, resulting in a surplus of approximately 77.1 million dollars.
Uganda also recorded a trade surplus of 56.71 million dollars with South Sudan, earning 61.27 million dollars from exports while importing goods worth 4.56 million dollars.
Trade with Rwanda generated a surplus of 21.89 million dollars, with exports valued at 31.32 million dollars against imports of 9.43 million dollars.
However, these surpluses were insufficient to offset the much larger deficits recorded with Kenya, Tanzania and Burundi.
The Ministry of Finance, Planning and Economic Development has attributed Uganda’s deteriorating trade balance with EAC partners partly to persistent non-tariff barriers, including protectionist measures, inconsistent regulations and arbitrary border policies that raise the cost of moving goods across the region.
In Tanzania, reported obstacles include non-standardised weighbridges, frequent roadblocks and a lack of mutual recognition of product standards and calibration certificates.
In Burundi, Ugandan traders have faced a 10 per cent surtax, known as the Surtaxe sur le Fer à Béton (SFB), on imported steel reinforcement bars.
Ugandan exports to Kenya have also faced restrictions affecting dairy products, poultry and sugar. Bilateral and regional engagements subsequently set July 1, 2026, as a deadline for removing trade barriers.
In October 2026, following a meeting between Presidents Yoweri Museveni and William Ruto, trade ministers from the two countries signed an agreement aimed at eliminating remaining barriers affecting agricultural and industrial products.
However, businesses remain cautious about whether all the restrictions will be permanently removed, given that some changes require legislative action before they can take full effect.
The persistence of such obstacles limits the ability of Ugandan producers to expand sales in neighbouring markets, even as the country continues to import substantial volumes of goods from within the region.
The widening trade deficit coincided with mixed performance among Uganda’s agricultural exports in August, with coffee, cotton, tea, sesame and beans recording lower earnings, while fish and maize exports improved.
Coffee export earnings, Uganda’s leading agricultural export revenue source, fell by 11 per cent from 204.08 million dollars in July to 181.65 million dollars in August.
The decline was mainly driven by a 12.86 per cent reduction in export volumes to 737,766 bags of 60 kilogrammes each.
The smaller fall in earnings compared with volumes suggests that higher average export prices partly cushioned the decline.
Cotton export earnings dropped by 59.5 per cent to 730,000 dollars, following a 59.67 per cent reduction in export volumes to 2,571.6 bales, each weighing 185 kilogrammes.
Tea earnings declined by 9.81 per cent, from 5.43 million dollars to 4.90 million dollars, as export volumes fell by 14.28 per cent to 5,114 tonnes.
Sesame earnings fell by 38.5 per cent to 740,000 dollars, while bean export revenues declined by 25.75 per cent to 3.61 million dollars, with lower export volumes contributing to the reductions.
Fish and fish-product exports, excluding regional markets, performed better, with earnings rising by 14.38 per cent to 11.46 million dollars.
The improvement was supported by a 6.72 per cent increase in export volumes, from 1,274.14 tonnes in July to 1,360 tonnes in August, alongside higher average export prices.
Maize exports also recorded stronger performance, with earnings increasing by 14 per cent to 13.3 million dollars. The increase was supported by export volumes of 20,831 tonnes and higher average prices.
The August figures point to a widening gap between Uganda’s rapidly growing import bill and its export earnings.
While some agricultural commodities and regional markets continue to generate foreign exchange, the scale of imports from neighbouring countries and persistent barriers facing Ugandan exporters remain central challenges for the country’s trade balance.