TradeMark Africa official expects Kenyan exports to Uganda to fall as Ugandan shilling weakens

A weaker Ugandan shilling is likely to cut the value of Kenya's manufactured exports to Uganda, Kenya's largest export market, according to Abhishek Sharma, senior director of transport and logistics at TradeMark Africa, a non-profit focused on growing intra-African trade. Business Daily quoted him on 20 October 2026.

"For a lot of our manufactured goods, you would definitely expect to see a decline in export values," Sharma said. A weaker shilling makes Kenyan goods dearer for Ugandan buyers, which he said would reduce demand.

The Ugandan shilling fell from UGX 3,710 to the US dollar at the end of June to a low of UGX 4,240 in the week before the report, a fall of more than 14%. Offshore investors have sold Ugandan treasuries, and importers, energy companies and the telecoms sector have shown strong demand for dollars.

In its 2026 Economic Survey, covered by The Star on 4 May 2026, the Kenya National Bureau of Statistics (KNBS) put Kenya's exports to Uganda in 2025 at KSh 162.4 billion, up 28.8% and accounting for 14.5% of total export earnings. Kenya's total exports in 2025 were KSh 1.119 trillion. Uganda was the largest single destination.

Uganda sold Kenya goods such as milk, maize and tea worth KSh 46.9 billion. Kenya's trade surplus with Uganda is more than KSh 100 billion a year.

Sharma said the same shift could draw more Ugandan goods into Kenyan border towns such as Busia and Malaba, and that traders there might protest. He did not expect a dramatic rise in imports. Imports from Uganda had already fallen before the currency slide, he said, citing trade issues, including the sugar levy. "We saw the reverse happening during Kenya's last currency depreciation cycle," he said, when Ugandan imports into Kenya slowed.

The Bank of Uganda raised its Central Bank Rate by 225 basis points, from 9.75% to 12%, at an emergency Monetary Policy Committee meeting on 14 October 2026. Governor Michael Atingi-Ego announced the decision. In its statement, the bank cited the escalation of the conflict in the Middle East, higher global energy prices and tighter global financial conditions.

It had raised the cash reserve requirement for commercial banks from 11% to 13.5% with effect from 24 September. Headline inflation rose to 4.6% in September from 4.1% in August. The bank projects headline inflation of 7.0% to 7.5% over the next 12 months and core inflation of 5.5% to 6.0%, against its medium-term target of 5% for core inflation.

The shilling rallied after the announcement, at one point gaining more than 6% against the dollar that day, Reuters reported on 14 October, citing LSEG data. Reuters linked the slide to high oil prices tied to the Iran war, which have raised demand for dollars in Uganda, a net fuel importer, and to portfolio investors pulling out of Ugandan securities since the US Federal Reserve raised its rate in September. "Our import bill is big; we have a trade deficit," local economist John Walugembe said, as quoted by Reuters. He said disrupted remittances from the Middle East and lower tourism receipts after Uganda reported Ebola cases in May and June had made matters worse.

Uganda's official reserves cover 3.7 months of imports, below the East African Community's 4.5-month target. Kenya's cover is 5.9 months.