KAMPALA, Uganda— Inefficiencies in Uganda’s cross-border trade, particularly lengthy delays affecting agricultural goods, are costing the country billions of dollars annually and threatening its regional competitiveness, according to a new study.
The report by the Private Sector Foundation Uganda (PSFU) and the Alliance for a Green Revolution in Africa (AGRA) found that border clearance for perishable commodities can stretch up to 14 days, far exceeding the East African Community’s (EAC) goal of 48 hours.
PSFU policy coordinator Martin Maku, who presented the findings, said Uganda is losing up to $3.5 billion annually in perishable agricultural goods due to poor infrastructure, including a lack of cold storage and power at border posts.
The trade decline is evident in export figures, Maku said. Uganda exported commodities worth $6 billion in 2023, but that figure dropped to $5.67 billion last year. He attributed this drop, in part, to the high cost of regulatory compliance, which fuels a growing informal trade estimated at more than $500 million.
“Over 70% of the respondents said they find difficulties in compliance,” Maku said, noting that high costs drive the informal sector.
The study identified physical and human barriers, including narrow roads at key border points like Malaba and Busia, and a previously noted issue of customs officers being distracted—a problem the Uganda Revenue Authority (URA) has since addressed.
Specific analysis of the Uganda-Tanzania border showed that inefficiencies there cost the country $16 million directly and up to $95 million indirectly, affecting transporters and logistics companies. Maku also highlighted a missed opportunity for food security, noting that Tanzania produces rice at 350 Ugandan shillings per kilogram, while Uganda produces it at 834 shillings.
The report strongly recommends adopting digitization and harmonizing systems between the URA and the Tanzania Revenue Authority. PSFU chief executive officer Stephen Asiimwe echoed the need for action, stating that despite reforms, the country continues to lose significant value due to non-tariff barriers and high logistics costs.
Speaking on behalf of the government, Johnson Abitekaniza, a commissioner in the trade ministry, stressed the importance of local government engagement and cooperatives to ensure farmers produce quality goods in high quantities for the market.
“You will not be able to export or reach the market if you cannot have quantities,” Abitekaniza said. He added that the private sector must take the lead on agro-industrialization and tourism, while the government focuses on creating an enabling environment.
