Uganda–Kenya Trade and Investment Mission Forges New Path for East African Economic Integration

A new chapter in East African economic cooperation officially commenced on July 6, 2025, with the launch of the Uganda–Kenya Trade and Investment Mission at the Hilton Garden Inn, Kampala. This four-day high-level engagement, concluding on July 9, has brought together a formidable delegation of diplomats, government officials, and private sector leaders from both Uganda and Kenya, signaling a concerted effort to deepen bilateral trade and investment ties. Spearheaded by the Uganda Consulate in Mombasa under the astute leadership of Consul-General Ambassador Paul Mukumbya, the mission is a testament to a results-oriented diplomatic approach that places economic development at the core of Uganda’s foreign policy.

The mission’s timing is particularly significant, coming at a period when regional integration within the East African Community (EAC) is gaining renewed momentum, despite historical trade frictions between the two economic powerhouses. This initiative aims to dismantle persistent barriers, foster greater investor confidence, and unlock the immense, untapped potential of intra-regional trade and investment.

The Genesis of the Mission: Economic Diplomacy in Action

The Uganda–Kenya Trade and Investment Mission is a shining example of proactive economic diplomacy. Ambassador Paul Mukumbya has been widely lauded for his business-focused approach, which prioritizes tangible economic benefits over traditional diplomatic formalities. Kenya’s High Commissioner to Uganda, H.E. Joash Maangi, articulated this sentiment, stating, “This is diplomacy that delivers results. Uganda’s economy is benefiting because of the Ambassador’s deliberate engagement with the business community.” This praise underscores a growing recognition across Africa that diplomatic missions must actively facilitate trade and investment to contribute meaningfully to national development.

Economic diplomacy, in essence, involves leveraging diplomatic tools and relationships to advance a country’s economic interests. For Uganda, a landlocked nation, the role of its Consulate in Mombasa is particularly critical. Mombasa, Kenya’s principal port, serves as the primary gateway for Uganda’s imports and exports. A smooth and efficient flow of goods through this corridor is vital for Uganda’s economic stability and growth. Ambassador Mukumbya’s focus on direct engagement with the business community, both Ugandan and Kenyan, at this crucial transit point, directly addresses logistical bottlenecks and fosters trust, which are essential for seamless cross-border trade.

Historically, the trade relationship between Uganda and Kenya, while significant, has often been fraught with challenges. Disputes over non-tariff barriers (NTBs), differing customs procedures, and occasional protectionist measures have sometimes hampered the full realization of their trade potential. This mission, therefore, represents a deliberate pivot towards a more collaborative and problem-solving approach, recognizing that mutual economic prosperity benefits both nations. By placing trade and economic development at the core of its foreign policy, Uganda is signaling a commitment to creating a predictable and supportive environment for investors and traders alike.

Voices from the Ground: Private Sector Engagement and Addressing Barriers

A cornerstone of this mission’s effectiveness lies in its robust engagement with the private sector. Ambassador Mukumbya specifically commended the head of the Kenyan private sector delegation, Mr. Samora Marcel, for his constructive approach in highlighting both existing opportunities and the practical barriers that impede cross-border trade. This candid feedback from businesses operating on the ground is invaluable for policymakers seeking to implement effective reforms.

Common trade barriers within the EAC region, which impede the flow of goods and services, include:

• Non-Tariff Barriers (NTBs): These are regulatory or administrative hurdles, such as restrictive import licensing, complex customs procedures, varying product standards, and arbitrary fees. NTBs often lead to delays at borders, increased costs, and reduced competitiveness for businesses. For instance, differing sanitary and phytosanitary (SPS) standards for agricultural products can prevent goods from crossing borders, even if they are otherwise compliant.
• Logistical Challenges: Inadequate infrastructure, particularly road networks, and inefficient border posts, contribute to high transport costs and long transit times. While significant investments have been made in infrastructure like the Northern Corridor and the Standard Gauge Railway (SGR), last-mile connectivity and border efficiency remain crucial.
• Lack of Harmonization: Inconsistent application of EAC common external tariffs, differing domestic taxes, and a lack of harmonized legal and regulatory frameworks can create confusion and complexity for businesses operating across multiple member states.
• Information Asymmetry: Businesses, especially small and medium-sized enterprises (SMEs), often lack adequate information about market opportunities, regulatory requirements, and potential partners in neighboring countries.

The call from several Kenyan delegates for the establishment of a Government of Uganda liaison office to ease trade facilitation and communication directly addresses the need for a single, accessible point of contact for resolving trade-related issues. Such an office could act as a dispute resolution mechanism, provide real-time information on trade policies, and streamline bureaucratic processes. The encouragement to address trade-related concerns through formal government channels rather than public protests is a significant point. Public protests, while sometimes effective in drawing attention to grievances, can disrupt trade, damage investor confidence, and strain diplomatic relations. A reliance on formal channels fosters trust, predictability, and adherence to the rule of law, creating a more stable and attractive business environment.

Ambassador Mukumbya underscored the Consulate’s continued commitment to ground-level engagement, recognizing that direct interaction with businesses is essential for understanding their challenges and fostering investor confidence. This approach ensures that diplomatic efforts are not abstract but are firmly rooted in the practical realities of cross-border commerce.

Government Commitment and Regional Integration: The EAC Vision

Ambassador Richard Kabonero, Head of Regional Economic Cooperation at Uganda’s Ministry of Foreign Affairs, delivered remarks on behalf of the Permanent Secretary, Mr. Vincent Bagiire, reaffirming Uganda’s dedication to economic diplomacy and deeper regional integration. He extended appreciation to Hon. Gen. Wilson Mbadi, Minister of State for Trade, for supporting the mission, highlighting the high-level government backing for this initiative.

Ambassador Kabonero emphasized that “This mission is not just a one-off event — it is a strategic investment in Uganda’s economic future. We are committed to positioning Uganda as a dependable, peaceful, and predictable trade partner.” This statement signals a long-term vision for Uganda’s role in the regional economy, moving beyond transactional engagements to building enduring partnerships based on trust and stability.

Hon. Gen. Wilson Mbadi, delivering the keynote address, spoke passionately on the forum’s theme, “Promoting Intra-East African Trade and Investment for Economic Development.” He issued a compelling call for urgent action to address the East African Community’s (EAC) persistently low intra-regional trade levels, currently languishing at 16% compared to a robust 67% within the European Union. This stark contrast highlights the significant untapped potential within the EAC, a bloc with a population of over 300 million people and a combined GDP exceeding $300 billion.

Dismantling Barriers for a Thriving EAC

The Minister’s emphasis on dismantling barriers that hinder trade within the region is critical. The low intra-regional trade is a symptom of several underlying issues:

• Non-Tariff Barriers (NTBs): As mentioned earlier, these remain a significant impediment. Despite EAC protocols aimed at eliminating them, NTBs often resurface due to protectionist tendencies, unharmonized standards, and inefficient border management. The EAC Customs Union Protocol and the Common Market Protocol aim to facilitate free movement of goods, services, capital, and people, but their full implementation faces challenges.
• Infrastructure Deficits: While progress has been made, inadequate road, rail, and port infrastructure still inflates transport costs and delays. The completion of key infrastructure projects like the SGR connecting Mombasa to Kampala and beyond, and the modernization of border posts, are crucial for reducing the cost of doing business.
• Lack of Product Diversification: Many EAC member states produce similar primary commodities, limiting the scope for diversified intra-regional trade. Promoting industrialization and value addition is essential to create more complementary trade flows.
• Access to Trade Finance: SMEs, which form the backbone of many EAC economies, often struggle to access affordable trade finance, hindering their ability to engage in cross-border commerce.
• Information Gaps: Businesses frequently lack comprehensive information about market opportunities, regulatory requirements, and potential partners in other EAC member states.

Minister Mbadi’s powerful statement, “Peace is the foundation of commerce, investment, and growth,” underscores a fundamental truth for any developing region. Political stability and security are prerequisites for attracting both domestic and foreign investment. Persistent conflicts or political instability deter investors, disrupt supply chains, and divert resources away from productive economic activities. The EAC, despite its economic aspirations, has sometimes faced internal tensions and conflicts, which inevitably impact investor confidence. A renewed commitment to peace and predictability within the bloc is thus not just a diplomatic ideal but an economic necessity.

Furthermore, his declaration that “The future of East Africa must be made in East Africa, for East Africans” is a clarion call for regional self-reliance and industrialization. This vision implies:

• Local Value Addition: Moving away from exporting raw materials and focusing on processing them within the region to create higher-value finished goods. This includes agro-processing, mineral beneficiation, and light manufacturing.
• Import Substitution: Producing goods locally that are currently imported from outside the EAC, thereby retaining wealth within the region and creating jobs.
• Strengthening Regional Supply Chains: Developing robust intra-EAC supply chains that reduce reliance on external markets and enhance regional resilience to global shocks.
• Youth Employment: Creating manufacturing and service sector jobs for the rapidly growing youth population, addressing a critical demographic challenge.

This ambitious vision requires coordinated industrial policies, investment in skills development, and a supportive regulatory environment across all EAC member states.

Showcasing Uganda’s Investment Climate: A Comprehensive Overview

The opening day of the mission featured comprehensive presentations from key Ugandan institutions, designed to showcase the country’s improving investment climate and specific opportunities. This multi-agency approach provides a holistic view for potential investors:

• Ministry of Works and Transport (MoWT): Focused on freight and logistics, the MoWT highlighted Uganda’s ongoing infrastructure development. This includes investments in road networks connecting key production areas to markets and borders, efforts to improve the efficiency of the Northern Corridor (connecting Mombasa to Kampala, Kigali, and Juba), and the development of multimodal transport systems, including inland water transport on Lake Victoria. These improvements are crucial for reducing the cost of doing business and enhancing Uganda’s competitiveness as a regional trade hub.
• Uganda Communications Commission (UCC): The UCC’s presentation likely focused on the country’s progress in digitalization, internet penetration, and the regulatory framework for the ICT sector. A robust communications infrastructure is vital for modern businesses, enabling e-commerce, digital payments, and efficient communication. Uganda has seen significant growth in mobile money and internet usage, which are foundational for a thriving digital economy.
• Insurance Regulatory Authority (IRA): The IRA’s role in de-risking investments and trade is paramount. They likely discussed the regulatory environment for insurance services, including trade credit insurance, political risk insurance, and other products that protect investors from unforeseen events. A well-regulated and stable insurance sector boosts investor confidence by providing a safety net for their assets and operations.
• Private Sector Foundation Uganda (PSFU): As the largest private sector apex body in Uganda, PSFU plays a crucial role in advocating for business interests, providing business development services, and facilitating partnerships. Their presentation would have highlighted opportunities for collaboration, available support services for investors, and the overall health of Uganda’s private sector.
• Uganda Investment Authority (UIA): The UIA is Uganda’s primary investment promotion agency. Their presentation would have detailed investment incentives (e.g., tax holidays, customs duty exemptions on capital goods), priority sectors for investment, and the “one-stop center” services designed to simplify the investment process for foreign and domestic investors. The UIA actively promotes sectors like agriculture, manufacturing, tourism, and ICT.
• Uganda Export Promotion Board (UEPB): The UEPB’s mandate is to promote and diversify Uganda’s exports. Their presentation would have focused on export opportunities, market access requirements, quality standards, and support services for exporters. This is critical for connecting Ugandan producers to regional and international markets.
• Uganda Free Zones Authority (UFZA): The UFZA highlighted the benefits of investing in Uganda’s Free Zones and Export Processing Zones. These designated areas offer attractive incentives such as 100% foreign ownership, exemption from various taxes (corporate income tax, withholding tax, customs duties on imports for production), and simplified administrative procedures. The goal is to attract export-oriented manufacturing and value-added processing, creating jobs and boosting foreign exchange earnings.

These presentations collectively underscored Uganda’s commitment to creating a conducive business environment, characterized by improving infrastructure, increasing digitalization of government processes (e.g., online business registration), and ongoing regulatory reforms aimed at enhancing ease of doing business. They also stressed the importance of increased collaboration with their Kenyan counterparts, recognizing that shared challenges require joint solutions.

Sectoral Focus and Business Interactions

The mission facilitated robust Business-to-Business (B2B) and Government-to-Government (G2G) interactions across several priority sectors, reflecting areas of high potential for both trade and investment:

• Agro-industry: Uganda is often referred to as the “Pearl of Africa” due to its fertile land and abundant rainfall, making agriculture the backbone of its economy. Opportunities in agro-industry include value addition to coffee, tea, dairy, fruits, vegetables, and grains. This involves processing raw agricultural produce into higher-value products for export and domestic consumption, such as roasted coffee, packaged tea, fruit juices, and dairy products. Investment in modern farming techniques, cold chain logistics, and processing facilities is crucial.
• Services: This broad sector offers diverse opportunities. Tourism, leveraging Uganda’s rich biodiversity (e.g., gorilla trekking, national parks), is a key area. Financial services, including banking, insurance, and fintech, are growing rapidly. The ICT sector, driven by increasing internet penetration and a youthful population, presents opportunities in software development, BPO (Business Process Outsourcing), and digital innovation.
• Manufacturing: With a focus on import substitution and regional supply chains, manufacturing is a priority. Opportunities exist in light manufacturing (e.g., textiles, plastics, consumer goods), construction materials, and assembly plants. The establishment of industrial parks and free zones provides dedicated infrastructure and incentives for manufacturers.
• Real Estate: Rapid urbanization, population growth, and infrastructure development are driving demand in the real estate sector. This includes commercial properties (office spaces, retail centers), residential housing, and industrial warehousing.

A lively Q&A session allowed Kenyan investors to offer direct feedback and commend Uganda’s openness to regional collaboration. This direct line of communication is vital for building trust and addressing specific concerns that might deter investment.

On-the-Ground Engagements and Future Prospects

Beyond the formal presentations and B2B/G2G sessions, the trade mission included practical, on-the-ground engagements designed to provide Kenyan delegates with a tangible sense of Uganda’s commercial and logistical capabilities.

• Courtesy Visit to the Uganda Free Zones and Export Promotion Authority (UFZA): This visit allowed delegates to engage directly with the authority responsible for free zones, understanding the incentives and operational benefits firsthand.
• Guided Tour of the Entebbe Free Zone: Seeing the physical infrastructure and operational businesses within the Entebbe Free Zone provides concrete evidence of Uganda’s commitment to facilitating export-oriented manufacturing. This is where investors can visualize their potential operations benefiting from tax incentives and streamlined customs procedures.
• Inspection of the Cargo Terminal at Entebbe International Airport: For businesses involved in air cargo, understanding the efficiency and capacity of the airport’s cargo operations is crucial. This visit provided insights into Uganda’s air logistics capabilities, vital for high-value and time-sensitive exports.
• Kampala City Tour: Experiencing Kampala’s vibrant commercial and cultural landscape offers delegates a broader understanding of the local market, consumer trends, and the overall business environment beyond official presentations.

This mission reflects the maturing Uganda–Kenya partnership, moving beyond historical rivalries to embrace the strategic value of economic diplomacy. It underscores the transformative potential of strong public-private cooperation in shaping the future of East African trade. By actively addressing barriers, promoting investment, and fostering direct engagement, both nations are laying the groundwork for deeper regional integration and shared economic prosperity. The success of such missions is not just measured in immediate deals but in the long-term confidence and collaboration they build, paving the way for a more integrated and prosperous East African Community.

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Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

9th July, 2025