The air is thick with noise, dust, and urgency. ‘Pants, Shs10,000!’ yells one trader. Another calls for space to pass. Everyone moves with purpose-some to sell, others to buy-all chasing that day’s profit.
That is the Kikuubo that built empires and dreams. Once a busy regional hub, it drew buyers from Rwanda, South Sudan, the Democratic Republic of Congo, and beyond, with trucks loaded with goods in cartons. Today, that rhythm has changed. Kikuubo has not lost its importance entirely, but the market is evolving quickly, facing new challenges while thriving during peak seasons like back-to-school and Christmas seasons.
In a small corridor of Papa Plaza, one of the arcades in downtown Kampala, Eddie Dollar-known fondly by fellow traders-arranges neatly folded men’s shirts in his tiny shop. ‘We used to sell to Rwandese and South Sudanese buyers who would clear everything,’ he says, sorting shirts by colour. ‘They would come with trucks every day. Now? Twice a week, if we are lucky. Rwanda instructed its people to buy directly from China, and South Sudan did the same. As a result, they cut back because our prices continued to rise. The more the government taxed us, the more we increased prices-they found it cheaper elsewhere.’
Despite its potential as a regional hub, Kikuubo is not a tax haven, but a large informal retail and wholesale trading centre where tax collection is harder and compliance is inconsistent. The government, through Uganda Revenue Authority, (URA) is working to formalise trade, improve digital receipting, and educate traders to ensure fair contribution to national revenue.
According to research by the Economic Policy Research Centre, over 50 percent of Uganda’s Gross Domestic Product (GDP) is generated in the informal economy, much of which remains untapped for taxation.
Uganda Revenue Authority (URA) notes that Uganda loses an estimated Shs5 trillion annually due to tax evasion, with a significant portion stemming from the informal sector. This sector encompasses areas like Kikuubo, where many small businesses operate outside the formal tax system.
Uganda’s domestic revenue has been rising steadily in recent years. In the 2024/25 financial year, the country collected Shs21.25 trillion from domestic taxes, a 15.59 percent increase compared to the previous year.
Total revenue collection, including international trade taxes, reached Shs31.37 trillion. For this current FY 2025/26, URA has a tax collection target of around Shs36.71 trillion, much more than Shs31.37 trillion collected in the previous year, with expectations of Shs40.090 trillion in FY 2026/27.
But all these ambitions still place the country among those with a narrow tax base compared to many other countries, with tax collections totaling less than 14 percent of GDP. The average for sub-Saharan countries is 18 percent and this is because a large share of economic activity is informal and untaxed.
As part of the revenue strategy, Parliament approved new tax policy measures expected to raise an additional Shs538.6 billion. A key component of the financing strategy includes improving tax administration to raise an additional Shs1.89 trillion.
While traders attribute the disappearance of the regional market to high taxes, Brian Sserunjogi, a research fellow at the Economic Policy Research Centre, explains that the challenges are not only about higher taxes.
‘Globally, aid and financing from developed countries has declined, putting pressure on countries such as Uganda to mobilise resources internally. That has led to tighter tax administration-not necessarily higher taxes-but reforms like the Electronic Fiscal Receipting and Invoicing Solution (EFRIS) to increase transparency and compliance. These measures have slowed down the clearance of goods.
Take the groupage scandal where URA insisted that each person in a container clears individually delaying access to goods. Traders get frustrated, and buyers from Rwanda and South Sudan simply divert to other markets.’
Sserunjogi adds, ‘URA needs to improve efficiency, streamline tax clearance, and educate traders on the new processes.’
Competition
Competition and infrastructure are also shaping Kikuubo’s evolution. Physical limitations, such as congested lanes, limited storage, and chaotic logistics, slow down business.
‘Kikuubo is so small, so congested, with limited storage-which becomes a problem,’ says Isaac Shinyekwa, head of trade and regional integration at the Economic Policy Research Centre.
He suggests building purpose-built trading hubs outside the city center, near borders, to attract regional buyers. Improved infrastructure, such as border posts, processing facilities, and better transport, could make it easier for neighboring traders to access Ugandan goods without navigating Kampala’s crowded streets.
Meanwhile, regional competition and policy changes are eroding Kikuubo’s uniqueness.
Jemba Kanakulya Mulondo, board member of Kampala City Traders Association notes that Uganda’s adoption of the EAC common external tariff leaves little incentive for foreigners to shop locally.
‘If we are all applying a 25 percent tariff, why would anyone come to Uganda?’ he asks. Regional buyers are learning from Ugandan traders and establishing similar markets in their own countries. ‘To bring regional players back, Uganda should produce goods that are unique,’ Mulondo adds.
Digital disruption compounds the challenge. Platforms like Kikuubo Online and Jumia reduce the need for physical visits, while foreign traders with easier access to credit intensify competition. Government strategies such as import substitution-raising taxes to protect local industries-have also reshaped trade, sometimes making re-exporting less attractive.
Aloysious Kitengo, a trade policy expert, emphasizes that local industries must produce at scale, quality, and price to remain competitive.
Yet, Kikuubo’s resilience remains. During peak seasons, crowds return in full force, a reminder of its enduring appeal for household items and clothing at fair prices.
The market may be changing, but its potential for relevance remains if Uganda invests in infrastructure, streamlines policies, supports local industries, and adapts to digital trends. Kikuubo’s old model may be fading, but its story of trade, hustle, and opportunity is far from over.