Rising transportation costs between Kenya and Uganda have become a significant problem for East African businesses. Ugandan traders plan to revive the National Trade and Facilitation Forum (NTF) and establish a shippers’ council to address the high transport costs along the Northern Corridor, which also includes the Democratic Republic of Congo, Rwanda, Burundi, and South Sudan. The goal is to reduce costs by eliminating trade barriers and harmonizing transport policies.
The sharp increase in transport costs is attributed to a bureaucratic customs system, inefficient cargo forwarding, and poor infrastructure. Traders highlight issues such as high port storage charges, poor shipping operations, and theft at Mombasa port, which negatively impact their competitiveness in international trade. These increased costs are then passed on to consumers, making some goods non-competitive.
Efforts have been made by the Uganda Revenue Authority (URA) and Kenya Revenue Authority (KRA) to ease some of these issues. For instance, URA introduced 24-hour clearing schedules at Kenya-Uganda border posts, and its computerization has significantly reduced clearing times. However, traders still face high costs, including daily charges for delayed goods and large deposits paid to shipping lines, often leading to months-long delays.
The transport infrastructure, including roads and rail, remains underdeveloped. The Northern Corridor’s road is almost impassable, while rail services are operating below capacity. This worsens transport costs and further reduces competitiveness, as Uganda-bound rail cargo at Mombasa port continues to pile up, threatening manufacturing operations in Uganda.
The rail system is plagued by inefficiencies, such as a lack of wagons and delays in shipment. The situation worsened when two ferries operating on Lake Victoria were removed from service, reducing the capacity of the route. Road transport, while faster, remains expensive, leaving many businesses with limited options for affordable and timely delivery.
