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The economic decline of the 1970s caused a trade
largely the result of a drop in official coffee exports
steady capital outflow. The government strengthened
controls in 1981, after Uganda had registered a US$169.2
trade deficit. By 1984 these controls had enabled Uganda
convert its deficit to a US$65.7 million trade surplus.
improvement, together with declining net imports of
changed the current account balance from a deficit of
million in 1981 to a surplus of US$107.1 million in 1984.
the same three years, however, an outflow of US$120.4
short-term capital led to a decrease in reserves of
million in 1984. In 1985 the trade balance remained
did the balance on current account.
During the 1980s, the volume of Uganda's major exports
maintained a fairly consistent increase, despite the
unit value. In particular, the country's major export,
experienced erratic price movements between 1980 and 1987.
price of coffee dropped sharply for two years but
recovered to 87
percent of the 1980 level in 1984. It then plummeted to
percent in 1985 and improved to 91 percent in 1986. This
was not sustained in 1987, when the index fell sharply to
percent. Similarly, the unit values of tea and tobacco,
traditional exports, also declined, while the price index
cotton, another traditional export crop, recovered from 57
percent in 1986 to 66 percent in 1987. An increase in the
of exports was not enough to compensate for the loss
the sharp fall in unit value. Export income from coffee
sharply from US$394 million in 1986 to US$264 million in
Cotton suffered a similar fate, dropping from US$5 million
US$4 million during the same period.
While export revenues fell, the value of many imports
increased. During 1987 total merchandise imports increased
record US$635 million. Of this amount, imports financed by
official resources were US$249 million on a cash basis,
suppliers' credit, US$34 million received on barter terms,
US$23 million acquired through the EAC Compensation Fund.
imports using unofficial foreign exchange were estimated
million. Loans and grants financed imports worth US$228
A major part of the rise in the import bill consisted of
funded capital goods considered necessary inputs for
rehabilitation and development projects.
Reflecting the decline in the overall value of exports
increased import costs, the trade deficit increased
1987 to US$301 million. The current account (trade
services, and unrequited transfers, taken together)
marginal surplus in 1986 but deteriorated substantially
1987 to register the highest deficit since 1982. At the
time, the capital account balance strengthened in 1987 to
register a surplus. This increase resulted in large part
improvement in medium-term and long-term loans. In sum,
overall balance showed a US$3 million deficit in 1987, a
substantial decline from the US$127 million surplus
1986. Domestic (bank and nonbank) sources financed
75 percent of the deficit while external sources financed
Data as of December 1990