Publication: Impact of informal cross border trade on Kenya-Uganda foreign relations, 2010-2020
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2024-04
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Mount Kenya University
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Abstract
This paper examines the multifaceted impact of informal cross-border trade on the Kenya and
Uganda foreign relations Kenya and Uganda during the period from 2010 to 2020. Informal
cross-border trade has been a prominent feature of the economic landscape between these two
East African neighbours, contributing significantly to their economies. However, this dynamic
trade relationship has also been accompanied by challenges and opportunities that have
influenced their diplomatic interactions. Through a comprehensive review of academic
literature, government reports, and new articles, this study analyses the economic, social and
political implications of informal cross-border trade on the Kenya-Uganda foreign relationship.
It explores how factors such as trade policies, border regulations, and infrastructural
developments have shaped the nature of cross-border interactions and influenced bilateral ties.
The findings suggest that informal cross-border trade has played a dual role in Kenya-Uganda
foreign relations. On one hand it has fostered economic integration, strengthened people-to-
people connections, and contributed to poverty alleviation in border communities. On the other
hand, challenges such as smuggling, informal taxation, and border disputes have strained
diplomatic relations and highlighted the need for enhanced cooperation and regulation. Overall,
this paper argues that informal cross-border trade has been a significant determinant of Kenya-
Uganda foreign relations, shaping the dynamics of cooperation and competition between the
two countries. The period from 2010-2020 witnessed a significant expansion of informal cross-
border trade between Kenya and Uganda, driven by factors such as proximity, shared cultural
ties, and economic complementarity. This trade phenomenon, predominantly conducted by
small-scale traders operating outside formal regulatory frameworks, has contributed to the flow
of goods, services, and capital across borders, stimulating local economies and enhancing
regional integration. The study was guided by three objectives; To analyse the background of
informal cross border trade on the Kenya-Uganda foreign relations; To establish the informal
commodities traded on the Kenya-Uganda border and; To analyse the mode of movement of
informal commodities on the Kenya-Uganda border. The study used territoriality and
universality, two opposing theories to interpret the impact of informal cross-border trade on
Kenya-Uganda foreign relations. The idea of universalism is to provide one with the sole
authority to manage resources and obligations. The territoriality doctrine is a legal principle
that states that the laws of a particular jurisdiction apply within the physical boundaries of that
jurisdiction. In other words, a country’s laws and regulation generally have authority and
jurisdiction within its own territory. In the study, both primary and secondary data was used.
The study targeted 150 border traders between Kenya and Uganda as well and 10 key
informants. Purposive sampling was used to select respondents, some were chosen at random
with trade viewpoints and participation readiness as the top priorities. It concludes by proposing
policy recommendations aimed at harnessing the potential benefits of informal trade while
addressing its associated challenges to promote sustainable economic growth and diplomatic
harmony in the region.
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impact, cross-border, trade, Kenya, Uganda