Uganda and Kenya’s agreement to scrap all tariff and non-tariff barriers is more than a diplomatic gesture; it is a litmus test for the East African Community’s ambition of a seamless common market.
The deal, sealed at a bilateral ministerial meeting in late August, promises to unclog borders, lower production costs, and restore confidence among traders who have long borne the brunt of protectionist policies. But it also raises a bigger question: can the two countries turn political goodwill into lasting economic transformation?
Uganda and Kenya’s agreement to scrap all tariff and non-tariff barriers is more than a diplomatic gesture; it is a litmus test for the East African Community’s ambition of a seamless common market.
The deal, sealed at a bilateral ministerial meeting in late August, promises to unclog borders, lower production costs, and restore confidence among traders who have long borne the brunt of protectionist policies. But it also raises a bigger question: can the two countries turn political goodwill into lasting economic transformation?
The agreement was reached during a two-day ministerial meeting between Gen. Wilson Mbasu Mbadi, Uganda’s Minister of State for Trade, and H.E. Lee Kinyanjui, Kenya’s Cabinet Secretary for Investments, Trade, and Industry. The meeting, held from August 29–30, 2025, was hailed by officials as a turning point in the practical implementation of EAC Customs Union protocols.
Why the Agreement Matters
For years, Uganda–Kenya trade relations have been marred by tit-for-tat restrictions that undermined the promise of a common market. Uganda, though one of the EAC’s most export-reliant economies, has seen its receipts weaken amid rising protectionism.
The Ministry of Finance’s July performance report underscored this urgency: export earnings dipped by 3.6% in June compared to May, sliding to $1.197 billion (about sh4.4 trillion). The fall was largely linked to reduced receipts from traditional commodities such as gold, tea, maize, and sugar. But behind these figures lay deeper concerns: tariff and non-tariff barriers imposed by EAC partners that blocked the free flow of goods.
Tiles, fish, dairy, meat, onions, and potatoes, all products Uganda could competitively supply across the region, have instead faced taxes, quotas, or outright bans. Analysts note that such restrictions distort competition, limit consumer choice, and contradict the very spirit of the EAC Treaty.
A Web of Tariffs and Non-Tariff Barriers
Kenya has often been accused of being Uganda’s toughest market to penetrate. Ugandan exporters have shouldered a 25% duty on eggs, raising costs by nearly sh913 per tray, despite the levy’s suspension at the EAC level.
Sugar exports have been blocked despite repeated diplomatic engagements. Exercise books have attracted an 18% VAT in Kenya, while tissue paper consignments have been turned away on packaging grounds.
Even technical regulations have been weaponised. Uganda’s calibration certificates for petroleum tankers have been rejected, forcing truckers to undergo costly recertification. Licensing delays for milk, poultry, and grain exports have added layers of frustration.
Uganda, for its part, retaliated with restrictions of its own. A 13% excise duty was slapped on Kenyan fruit juices processed with sugar sourced outside the EAC. Kenyan tissue paper also faced entry barriers, further inflaming the trade row.
“The result has been a vicious cycle of suspicion and retaliation,” an economist in Kampala noted. “Instead of deepening integration, the two biggest economies in the EAC have been locking each other out.”
The Breakthrough
The August agreement seeks to reverse this trajectory. The ministers resolved that all products originating from either country should be treated as “transfers” rather than imports.
Gen. Mbadi confirmed: “We have agreed to remove all discriminatory excise duties, levies, and charges of equivalent effect. All duties contrary to the EAC Customs Union Protocol will be dropped by both countries.”
Among the charges to be scrapped is the 10% duty Uganda had been levying on Kenyan maize bran, wheat bran, and cotton cake, key raw materials for local industries. Officials argue that lifting such restrictions will not only cool tensions but also lower production costs for manufacturers and farmers who rely on cross-border inputs.
Unclogging Borders
But tariffs are only part of the problem. Border congestion has crippled trade efficiency and inflated logistics costs. The ministers began their meeting with site visits to Malaba and Busia, East Africa’s busiest trade gateways.
Truck drivers complained of endless queues, multiple checkpoints, and corruption. “Sometimes the line stretches four kilometres for days because officials take long breaks, creating artificial traffic jams,” lamented Suudi Motela, chairperson of the Kenyan Long-Distance Truck Drivers Union.
The ministers ordered immediate action: clear the existing congestion within 24 hours, cap Malaba queues at four kilometres and Busia at 500 metres, and ensure round-the-clock clearance of cargo. They directed Uganda Revenue Authority (URA), Kenya Revenue Authority (KRA), and Uganda National Bureau of Statistics (UNBS) to harmonize checks, upgrade roads and bridges, and fully operationalize One Stop Border Posts (OSBPs).
A standing joint technical committee will now monitor compliance and provide a rapid-response mechanism to new disputes.
Presidential Pressure
The breakthrough followed a July 2025 directive from Presidents Yoweri Museveni and William Ruto. The two leaders insisted that trade between Uganda and Kenya should no longer be treated as conventional imports and exports but as exchanges between partners in a shared market.
Their instruction was clear: decongest borders, eliminate discriminatory charges, and revive the EAC’s founding principle of seamless movement of goods, services, and people.
Regional Implications
According to Oscar Kamukama, Uganda’s representative on the East African Business Council (EABC) board, Uganda has paid the highest price for barriers because of its landlocked geography.
“Every delay at Malaba, Elegu, or Goli translates into higher costs, spoilage of perishables, and lost markets for farmers,” Kamukama explained. “These inefficiencies inflate consumer prices, erode competitiveness abroad, and weaken trust in regional integration. They are sustained by protectionist impulses, poor recognition of standards, and corruption.”
If faithfully implemented, the new pact could be a watershed moment for the region. Removing tariff and non-tariff barriers will not only ease trade flows but also deepen supply chains, attract investment, and strengthen the EAC’s collective bargaining power in global markets.
But analysts caution that past promises have faltered at the level of enforcement. Whether this agreement will outlast political cycles and bureaucratic inertia remains to be seen.
For now, traders at Malaba and Busia will be watching closely. Their livelihoods, and indeed the credibility of the East African integration project, may hinge on whether this breakthrough delivers more than words.
