Trade worth more than Sh163.6 billion between Kenya and Uganda will now flow without tariffs after the two countries agreed to classify all cross-border goods as transfers.

The landmark decision was reached following a series of meetings by the ministers of trade from both sides.

The breakthrough was captured in a joint communique issued after ministerial talks.

“The ministers directed that all products originating between Kenya and Uganda be treated as transfers,” the joint communique stated.

The directive followed consultations in Nairobi and Mbale, Uganda, where officials scrutinised persistent bottlenecks at border points and prepared recommendations for the ministers.

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The initiative stemmed from orders given by President William Ruto and Uganda’s President Yoweri Museveni, who instructed their trade ministers to resolve outstanding non-tariff barriers.

In response, Kenya’s trade minister Lee Kinyajui and his Ugandan counterpart Wilson Mbasu Mbadi held discussions in Nairobi on July 31, 2025, before convening a technical session in Mbale from August 18 to 22.

During the Mbale meeting, experts visited the Suam, Busia, Malaba and Lwakhakha border points to investigate the reasons behind delays and congestion.

Their findings were presented later that month, on August 29 and 30, when the two ministers met again to adopt the proposals that laid the groundwork for the tariff-free arrangement.

Uganda remains Kenya’s largest trading partner. In 2024, exports from Kenya to Uganda amounted to Sh125.9 billion, while imports from Uganda were valued at Sh37.7 billion.

Tanzania, however, led in supplies to Kenya from the wider East African Community, with exports valued at Sh58.7 billion that same year.

The communique further noted that the ministers pledged to dismantle all tariffs and non-tariff barriers that have strained trade, as well as to enforce obligations under the East African Community Treaty and Protocols.

“In this regard, the ministers agreed to remove all discriminatory excise duties, levies and other charges of equivalent effects,” it stated.

Border congestion was a particular concern, especially at Malaba and Busia.

Agencies responsible were ordered to clear existing snarl-ups within 24 hours, with limits set at four kilometres for Malaba and 500 metres for Busia.

The communique added, “The ministers directed the border management agencies to ensure 24/7 – hour operations of their respective functions.”

Uganda also undertook to resolve delays linked to operations at the Malaba weighbridge, a critical checkpoint along the northern corridor.

Meanwhile, infrastructure works at Suam and Lwakhakha were listed among priority projects intended to ease the flow of goods and people.

The move builds on President Museveni’s recent visit to Kenya, during which he and Ruto signed eight bilateral agreements, signalling a renewed commitment to strengthening regional ties.

With these measures, the two countries are positioning themselves to ease trade flows and deepen economic integration within the East African Community.