Introduction

Understanding Uganda’s Balance of Payments (BoP) offers critical insight into the country’s economic health, external vulnerabilities, and global trade dynamics. In 2025, Uganda’s BoP reveals how oil-related investments, gold exports, remittance fluctuations, and external borrowing shape the nation’s macroeconomic trajectory.

1. What Is the Balance of Payments?

The Balance of Payments is a systematic record of all economic transactions between Uganda and the rest of the world. It comprises three main components:

• Current Account: Tracks trade in goods and services, primary income (e.g., interest and dividends), and secondary income (e.g., remittances and aid).
• Capital Account: Covers capital transfers and acquisition/disposal of non-financial assets.
• Financial Account: Reflects cross-border investment flows—foreign direct investment (FDI), portfolio flows, loans, and banking capital.

2. Current Account: Deficits and Composition

Recent data show a consistent current account deficit, reflecting imports outpacing exports plus income inflows.

• 2024: Deficit of ~USD 4.8 billion, up 27.6% from USD 3.8 billion in 2023, driven by soaring imports tied to oil sector development and weakened remittances/grants. Uganda
• Imports: Reached USD 12.22 billion (+20.3%), fueled by machinery, base metals, and oil infrastructure. Exports grew 22.1% to USD 8.55 billion, aided by coffee, cocoa, and gold. Uganda
• Quarter 1, 2025: Current account deficit stood at USD 723 million (~9.2% of GDP), narrowing from ~USD 1.02 billion previously. Trading Economics

3. Financial Account: Investment Landscape

• FDI Flows: Remain robust, thanks to ongoing investments in oil projects and mining. IMF eLibraryBusiness Focus
• Other Financial Flows: Portfolio flows and debt financing lag, restraining reserve buildup. IMF eLibrary
• Q1 2025: Capital and financial account deficit reached USD 1.03 billion. Trading Economics

4. Structural Imbalances: External Liabilities & FX Exposure

Uganda’s non-financial corporate (NFC) sector carries significant external debt. In 2022, net external indebtedness was around 35% of GDP—a figure that could rise to 44% under sustained exchange rate depreciation. IMF eLibrary

5. Shifts Ahead: Oil, Reserves, and Long-Term Outlook

• Oil Production Onset: The IMF anticipates double-digit economic growth (~10.8% in FY2025/26) as crude oil production begins. This is expected to fuel future export revenues, improving BoP. Reuters
• Gold Exports Surge: In 2023, Uganda’s gold exports jumped to USD 2.3 billion—over 10 times the previous year—thanks to new processing capacity and tariff suspension. Reuters
• Foreign Exchange Reserves: As of June 2024, reserves hovered around USD 3.2–3.7 billion (below the 4-month import target), pressured by debt servicing and limited external inflows. IMF eLibrary+1

6. Summary Table

Component	Recent Trend
Current Account	Large deficit—imports exceed exports + earnings
Trade Balance	Persistent deficit; oil imports and machinery rise
Financial Account	Heavy reliance on FDI; weak portfolio inflows
Corporate FX Exposure	Elevated external debt—FX risk exposed
Reserves	Below recommended import coverage
Growth Outlook	Boost from oil & gold exports

Conclusion

Uganda’s BoP position in 2025 underscores key economic dynamics—a widening current account deficit tied to oil-sector investments, offset partially by export rebounds and rising gold earnings. Moving forward, managing external debt, strengthening reserves, and converting oil potential into sustained revenue will be essential for external resiliency.