Uganda’s Balance of Trade Narrows Sharply in February 2026
Uganda’s external trade position improved markedly in February 2026, as the country posted its smallest trade deficit in more than a year. The latest data show a significant contraction in the trade gap, raising questions about the sustainability of this trend and its implications for currency stability and monetary policy.
Big-Picture Snapshot
Drivers this month
- Exports: Modest recovery in agricultural shipments
- Imports: Decline in capital goods purchases
- Commodity prices: Stable coffee and tea prices
Policy pulse
The February deficit of UGX -134.9M stands well below the Bank of Uganda’s medium-term external gap target. The central bank has not issued a formal statement in response to the latest figures.
Market lens
Currency traders reacted with moderate UGX strength after the data release. The sharp narrowing of the trade deficit surprised market participants, who had anticipated a much wider gap. This improvement may ease short-term pressure on the shilling, though sustainability remains uncertain.Foundational Indicators
Historical context
- February 2026: UGX -134.9M
- January 2026: UGX -501.9M
- December 2025: UGX -363.3M
- November 2025: UGX -798.2M
- October 2025: UGX -593M
- September 2025: UGX -589.8M
MoM and YoY comparisons
The February deficit narrowed by UGX 367M from January’s reading. Compared to November’s UGX -798.2M, the improvement is even more pronounced. The 12-month average deficit stands at approximately UGX -540M, underscoring the scale of February’s outperformance.
Methodology and sources
Figures are sourced from the Sigmanomics database and official Bank of Uganda releases[1]. Data reflect customs-based trade flows, reported in millions of Ugandan shillings.
Chart Dynamics
Forward Outlook
Scenario analysis
- Bullish (25–35%): Sustained export growth and stable imports keep the deficit below UGX -200M through mid-2026.
- Base case (50–60%): The deficit widens moderately, reverting toward the 12-month average as import demand normalizes.
- Bearish (10–20%): External shocks or import surges push the deficit back above UGX -500M.
Risks and catalysts
Upside risks include stronger-than-expected agricultural exports and favorable terms of trade. Downside risks stem from potential increases in fuel and capital goods imports, or weaker global demand for Uganda’s key commodities.
Market lens
Bond yields held steady, reflecting cautious optimism. Investors are watching for confirmation that February’s improvement is more than a statistical outlier.Closing Thoughts
Key takeaways
- Uganda’s trade deficit narrowed to its lowest level in over a year in February 2026.
- Both export resilience and import moderation contributed to the improvement.
- Market participants remain cautious, awaiting further data to confirm a lasting trend.
Policy pulse
With the trade gap well below recent averages, policymakers have room to assess the durability of this shift before considering any response.
Key Markets Reacting to Balance of Trade
Uganda’s sharp improvement in its trade balance has drawn attention from currency, equity, and crypto markets. The following symbols, verified from Sigmanomics, have shown notable sensitivity to shifts in Uganda’s external position. Each reflects a unique channel through which trade data can influence asset prices and investor sentiment.
- USDUGX – The Ugandan shilling strengthened modestly after the trade data, reflecting improved external balances.
- AAPL – As a global exporter, Apple’s supply chain exposure to African markets can be indirectly affected by regional trade shifts.
- BTCUSD – Bitcoin trading volumes in Uganda have historically spiked during periods of currency volatility linked to trade data.
| Year | Avg. Trade Deficit (UGX M) | USDUGX Trend |
|---|---|---|
| 2020 | -410 | Shilling depreciated |
| 2021 | -470 | Shilling stable |
| 2022 | -520 | Shilling depreciated |
| 2023 | -550 | Shilling depreciated |
| 2024 | -600 | Shilling depreciated |
| 2025 | -590 | Shilling depreciated |
| 2026 YTD | -318 | Shilling appreciated |
Periods of narrower trade deficits have historically coincided with relative shilling strength against the US dollar, while wider gaps have pressured the currency lower.
Frequently Asked Questions
- What is Uganda’s current balance of trade?
- Uganda’s trade deficit narrowed to UGX -134.9M in February 2026, the smallest gap in over a year.
- Why did Uganda’s trade deficit improve so sharply?
- The improvement reflects a combination of stronger exports and reduced imports, particularly in capital goods.
- How does the balance of trade affect Uganda’s currency?
- A narrower trade deficit tends to support the Ugandan shilling, as seen in the moderate appreciation following the February data release.
Uganda’s February trade data marks a pivotal shift, but sustainability will depend on trends in both exports and imports over the coming months.
Updated 3/4/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
- [1] Sigmanomics Economic Database, Uganda Balance of Trade, accessed March 4, 2026.
February’s trade deficit of UGX -134.9M marks a dramatic improvement from January’s UGX -501.9M and is well below the 12-month average of UGX -540M. The last time the deficit was this narrow was before August 2025, when the gap stood at UGX -515.9M.
Over the past six months, Uganda’s trade deficit fluctuated between UGX -798.2M (November) and UGX -363.3M (December), before tightening sharply in the latest print. This reversal breaks a persistent trend of wide monthly deficits.