After a fall in the structural trade deficit in 2009, Uganda's external imbalances will widen as import growth picks up. Export growth will be supported by regional trade-this accounts for more than one-half of total exports, and re-exports to Southern Sudan and the DRC are increasingly important-although a drop is expected in the value of coffee exports owing to falling global prices. After stagnating in 2009, the pace of import growth will quicken owing to a strong currency, higher oil prices and growing capital imports for infrastructure projects (particularly in the oil sector). Import costs will outpace the growth in exports, and the trade deficit will therefore widen in both years. We forecast a current-account deficit of 4.8% of GDP in 2010 and 5.7% of GDP in 2011. This will be partly financed by an increase in foreign direct investment (FDI) as oil-related FDI flows in.