Uganda's trade deficit widened, with imports from Tanzania accounting for as much as 19%.
Imports from Tanzania accounted for 19.2% of Uganda's total imports in May, followed by China, India, Kenya and the United Arab Emirates at 15%, 9.6%, 9.2% and 7.9% respectively, the data showed. Tanzania has now replaced Kenya as Uganda's largest source of imports in the region.
Uganda has a deficit of $105 million with the East African Community (EAC), with the largest deficit of $138 million with Tanzania, exceeding its surpluses with South Sudan, Burundi and Rwanda of $50.5 million, $6 million and $20,000, respectively.
The country's export earnings to the EAC were $117 million, up 73 percent from May 2020, while imports were $222 million, up 44 percent from the same period. Export earnings to other regions, excluding the EAC market, increased from $427 million in April to $455 million in May. The Middle East was the top destination for Uganda's commodity exports, accounting for 42.7% of its total exports, followed by the EAC (25.6%), the rest of Africa (13.64%) and the European Union (11.62%). However, with the exception of the Middle East, Uganda still runs a trade deficit. The largest trade deficit was with Asia at $259 million, up 16.3 percent from April.
Nigeria plans to build a trans-Sahara gas pipeline
Nigeria is stepping up its investment in an Africa-Europe gas pipeline that, if completed, will bridge the gap between the two continents in energy sources and consumers. Nigerian officials say President Buhari considers the pipeline so important that he wants the project to succeed.
Nigeria, one of the world's top 10 natural gas producers with more than 600 trillion cubic feet of natural gas, has launched the first phase of a so-called Saharan and European gas pipeline project to build the Ajaokuta-Kaduna-Kano (AKK) gas pipeline. An extension of an existing West African gas pipeline that will transport gas from Nigeria to Benin, Togo and Ghana, eventually extending the pipeline through the Sahel and on to Algeria, Morocco and Europe.
Although Nigeria pledged $475m in matching funds, the project hit a financing bottleneck in July after delays in securing funding from China. Some Nigerian officials said they were still in talks with China, while the Nigerian National Petroleum Corporation said it was exploring other financiers as a plan B. The Nigerian Natural Gas Corporation, a subsidiary of the Nigerian National Petroleum Corporation that is driving the project, will provide equity financing worth $434 million.
South Sudan's economy will shrink by 1.1% due to lower oil revenues
Fitch Ratings, a Ratings agency, says south Sudan's real GDP is expected to shrink by a further 1.1 per cent in 2021 because of the decline in oil revenues. The country's oil revenues account for 90 per cent of its total merchandise export revenues and more than 80 per cent of total government revenues.
In its research report on the country's macroeconomic situation, Fitch said foreign and private investment in the oil industry will continue to be hampered by insecurity, resulting in an 8% decline in the country's oil production in 2021. The country's non-oil economy is also expected to struggle to recover in 2021 as the dominant oil industry shrinks, the country's economy will remain in recession and inflation will increase, depressing the country's purchasing power.
South Sudan's inflation rate is 19 percent, the highest in East Africa. The country's economic woes have been exacerbated by the global pandemic and two consecutive years of flooding. To finance its infrastructure development budget, its regular budget, and its peace budget, the country has had to rely on external loan financing, pushing it further into debt. But on the bright side, the country's real GDP is expected to return to growth in 2022, rising by about 1.7%, as weather normalties return and travel restrictions are eased.
Rwanda raised $620 million with a 10-year Eurobond
Once again successfully issued on August 3, Rwanda to raise the total $620 million, an interest rate of 5.5%, term of 10 years of European bonds, funds raised by a expires in 2023 is mainly used to repay the $400 million of European bonds, the rest of the money will be used to fund key projects, to stimulate the economy recover new crown outbreak caused by the recession. The bond issue also makes Rwanda the second country in the region after Kenya to issue a Eurobond to repay maturing bonds.
Central Bank governor John Rwangombwa said the low interest rate would help ease the government's interest payments over the next 10 years, while promoting the country's economic transformation and debt sustainability strategy. Over the past 12 months, the government has aggressively borrowed to contain the COVID-19 pandemic despite a revenue shortfall, while its public and publicly guaranteed debt is projected to have increased from 62.9% of GDP in 2019 to 71% in 2020 and is projected to rise to 84% of GDP in 2023, according to the latest World Bank estimates.