When Ugandan trader Dennis Mutagaya received a call that one of his client’s trucks had been broken into while transiting through Kenya, he thought the worst was over once the theft was reported. It wasn’t.
Days later, the Kenyan authorities slapped his client with a tax bill for the very goods that had been stolen.
‘The truck was Kenyan-registered, and the theft happened within Kenya,’ Mutagaya recalls, his frustration still evident.
‘Yet authorities compelled the importer to pay taxes for the stolen goods before releasing another of his trucks that wasn’t even involved.’
The disputed tax, Kshs6.1m (about Shs163m), left the exporter stranded for months, missing shipping deadlines and losing contracts.
‘Kenya’s policy, we were told, is that once you lose cargo in Kenya, you pay taxes for it, even when it’s stolen,’ Mutagaya says, doubting if this ‘makes sense’.
‘If cargo is in transit and gets stolen, responsibility should lie with the host authorities, not the victim.’
His ordeal is not isolated. Across Uganda’s logistics sector, traders are crying foul over what they call ‘punitive and outdated’ customs rules and unilateral enforcement practices by Kenya, Uganda’s biggest trade partner and the gatekeeper of East Africa’s busiest trade route.
For Uganda, Kenya is more than just a neighbor; it’s the country’s main corridor to the sea.
More than 80 percent of Uganda’s international trade flows through the Port of Mombasa, making it the single most critical artery for the landlocked nation’s economy.
Each year, more than 10 million tonnes of Ugandan imports and exports pass through Mombasa, accounting for nearly a third of the port’s total throughput.
The corridor also serves Rwanda, South Sudan, and parts of eastern DR Congo, but Uganda is the anchor client, the one that keeps Kenya’s logistics chain humming.
Yet, as Mutagaya’s experience shows, that dependence comes with vulnerability, and Uganda Revenue Authority (URA) clearly understands this pain.
URA Commissioner for Customs, Asadu Kigozi, says as someone responsible for facilitating trade, “I understand the pain’.
‘Our biggest challenge remains infrastructure at Malaba and Busia. The efficiencies achieved at the Port of Mombasa are often lost at the border.’
Kigozi says both Uganda and Kenya must move beyond border bottlenecks and adopt ‘smarter, digital systems’ that make cargo movement predictable and transparent.
‘You cannot release 1,400 trucks a day from Mombasa and expect them to pass through a single-lane post. We need systems where a truck scanned in Mombasa doesn’t have to be scanned again at Malaba,’ he says.
The message was clear: the future of East African trade depends not on slogans of integration, but on the reality of working systems and mutual trust.
Kenya understands how important Uganda is, with the country’s High Commissioner to Uganda, Joash Maangi, acknowledging the growing frustration.
‘Customer is king, and we value Uganda as our largest trading partner. Both governments are committed to eliminating barriers that hinder the free flow of goods and services,’ he says, pointing to reforms initiated by President William Ruto, including 24-hour operations at Mombasa Port, reduced weighbridge checks, and faster clearance to make the Northern Corridor more efficient.
But Maangi defends Kenya’s controversial customs policy on transit goods, saying it was designed to prevent tax evasion by unscrupulous traders who divert cargo into the local market.
‘The law was meant to prevent abuse of the system. But we are improving coordination to ensure genuine traders are not unfairly punished.’
Still, the policy’s blunt application continues to hurt legitimate importers. Ugandan freight companies have previously warned that unless the two governments create a joint redress mechanism, the cost of doing business in the region will continue to rise.
But beyond the growing cost of doing business, the policy is a test of integration, in which Ugandan traders continue to be affected by delays, red tape, and what many traders call ‘bureaucratic arrogance.’
The episode over stolen cargo is just the latest flashpoint in a decade-long tug-of-war between regional policy and national interest.
As officials trade promises of reform, traders like Mutagaya are still waiting, not for speeches, but for systems that work.
‘We just want fairness,’ he says. ‘When cargo moves smoothly, both Uganda and Kenya win.’