Formal exports from Uganda to South Sudan in December 2013 declined to 23.5 billion shillings, a drop of 45.9percent, according to statistics from Bank of Uganda (BoU).
South Sudan is Uganda’s largest export market and in November 2013, exports were valued at 43.4 billion shillings.
The drop has been attributed to the political crisis that halted trading and export activity. If compared to December 2012, the export performance was 65 billion shillings meaning that there has been a drop of 67percent in December 2013.
On December 15, fighting broke out in South Sudan after a political disagreement between President Salva Kiir and his former vice president Riek Machar deteriorated.
The war that started in Juba spread to four other states leaving 1000 dead and almost half a million others displaced.
Richard Kamajugo, the Commissioner for Customs at Uganda Revenue Authority (URA) explains that the drop in profits by companies that export to South Sudan can be attributed to the slowdown in exporting.
On an annual basis, exports to South Sudan dropped by 40percent from one trillion shillings in 2012 to 603 billion shillings in 2013. The December 2013 export figures are the lowest since September 2007 on a monthly basis.
On Tuesday, Dr Louis Kasekende, the Deputy Governor BoU, warned that Uganda’s economy is likely to face “demand shocks” if the situation in South Sudan persists.
There has been relative calm restored in Juba – the capital – with some traders resuming business, on a small scale. However, other parts of South Sudan, according to traders remain volatile.
Uganda Clays Limited (UCL), the largest clay products manufacturer in Uganda, claims it is stuck with orders worth one billion shillings from South Sudan.
Nazarious Rukanyangira, Head of Marketing at UCL says that South Sudan is the single largest destination of their clay products.
As a result of the crisis, D R Congo became the largest export destination for Uganda products since 2005.
In 2013, formal exports to D R Congo rose by 12.6percent to 654.9 billion shillings. Ministry of Finance, Planning and Economic Development, BoU, Ministry of Trade and other government agencies are yet to come up with a full report on how much Uganda has lost due to the South Sudan crisis.
In the informal trade exports, however, there was growth of 4.5percent to 32.3 billion shillings in the month of December. Overall, informal trade exports to South Sudan also rose in the whole of 2013, compared to 2012.