Uganda’s trade relationship with Kenya, once a cornerstone of regional economic cooperation, is facing its most significant challenge in years. According to the latest data from the Bank of Uganda (BoU), the country’s exports to Kenya have plummeted by a staggering 65 percent, marking the sharpest decline in the last six years. In March 2025, Uganda exported goods worth just $17.7 million (Shs65 billion) to Kenya, down from an average monthly export value of $50 million (Shs185 billion). The dramatic fall has sent shockwaves through Uganda’s business community and raised urgent questions about the future of cross-border trade within the East African Community (EAC).
The Numbers Behind the Decline
The BoU’s report reveals a stark contrast between Uganda’s export performance with Kenya and its trade with other regional partners. While exports to Kenya have collapsed, other destinations such as South Sudan and the Democratic Republic of Congo (DRC) have emerged as leading markets for Ugandan goods. For example, in the same period, exports to South Sudan and the DRC reached $53.5 million (Shs196 billion) and $47 million (Shs173 billion), respectively. Meanwhile, exports to Rwanda also declined sharply, dropping to $2.5 million (Shs9.2 billion), compared to their previous average of $20 million (Shs74 billion).
This sudden drop is not an isolated event but part of a broader pattern of trade disruptions within the EAC. Historically, Kenya and Uganda have maintained robust trade ties, with Uganda exporting a diverse range of products—including maize, beans, dairy products, sugar, and manufactured goods—across the border. However, the recent downturn has been attributed to restrictive trade measures imposed by Kenya, allegedly to protect its farmers from price drops caused by good harvests.
Root Causes and Economic Implications
According to Dr. Adam Mugume, the BoU’s director of research, the decline in exports to Kenya is largely due to non-tariff barriers and trade restrictions. “The value of maize and bean exports declined by nearly 60 percent due to these restrictions,” Dr. Mugume noted. Kenyan authorities have reportedly tightened border controls, increased inspections, and imposed stricter phytosanitary standards, making it more difficult for Ugandan produce to enter the market.
The impact of these measures has been immediate and severe. Ugandan farmers and agribusinesses, who have long relied on Kenya as a key market, are now scrambling to find alternative buyers. The sudden loss of market access has led to significant financial losses and has put pressure on Uganda’s export sector, which had been enjoying a period of growth driven by strong performances in coffee, gold, cocoa, and fish.
Despite the setback with Kenya, Uganda’s overall export sector remains resilient. In March 2025, the country’s export earnings surged by over 40 percent compared to the same period last year, reaching $899.10 million. This growth was fueled by increased demand for coffee, cocoa beans, mineral products, sugar, and fish, and helped narrow Uganda’s trade deficit significantly—from $397.58 million in March 2024 to $213.63 million in March 2025.
Broader Regional and Policy Context
The decline in exports to Kenya and Rwanda highlights the fragility of regional trade agreements and the vulnerability of smaller economies to policy shifts by their neighbors. While Uganda has managed to offset some of the losses by finding new markets in South Sudan and the DRC, the long-term sustainability of this strategy is uncertain. The EAC, which was designed to promote economic integration and free movement of goods, is now facing serious challenges as member states resort to protectionist measures.
The Ugandan government has called for urgent dialogue with Kenyan authorities to resolve the trade impasse. However, with both countries facing domestic pressures—Kenya seeking to protect its farmers and Uganda striving to safeguard its export revenues—finding a mutually acceptable solution will not be easy.
Looking Ahead: Challenges and Opportunities
The sharp drop in exports to Kenya is a wake-up call for Uganda’s policymakers and business community. It underscores the need for greater diversification of export markets and the importance of strengthening value chains within the country. While the rise in exports to South Sudan and the DRC is encouraging, these markets are not without their own risks and challenges.
In the short term, Uganda must continue to advocate for the removal of trade barriers within the EAC and seek to resolve disputes through diplomatic channels. In the longer term, the country should invest in value addition and product diversification to reduce its reliance on a few key markets and commodities.
The current crisis also presents an opportunity for Uganda to reassess its trade strategy and build more resilient economic partnerships. By addressing the root causes of the export decline and fostering a more open and predictable trading environment, Uganda can position itself for sustainable growth in the years ahead.