By:Chipreports

The escalating security crisis in South Sudan is taking a huge toll on Uganda’s freight and logistics industry, with transporters facing disruptions to move cargo into the conflict-hit country.

Charles Mwebembezi, Chairman of the Uganda Freight Forwarders Association (UFFA)—an umbrella association of transport and freight logistics companies in Uganda—has raised concerns over the growing disruptions in the world’s youngest country.

“Most of our clients have cargo going to [South] Sudan, but of late, they cannot go easily…. That affects what would have gone there, the money that we would have earned. So definitely, our members will get affected,” Mwebembezi said.

Mwebembezi, who was speaking to reporters at the sidelines of the UFFA Annual General Meeting in Kampala, added, “About two months ago, I was there (in South Sudan) when it was still okay. I had actually gone to inaugurate a board of the Association there, and by then, things were okay. But now, they call me; they are complaining; they are saying our cargo has disappeared. So, it affects the revenue here and, of course, what people were getting from those businesses.”

The concerns arise following the breakdown of the fragile power-sharing agreement between President Salva Kiir and his rival, First Vice President Dr. Riek Machar, who is currently under house arrest.

Fears have emerged that Machar’s detention could escalate violence, particularly after his party declared that his arrest was tantamount to the collapse of the peace deal and a shift toward renewed conflict.

Many Ugandan businesses depend on South Sudan as a key export destination.

The Ugandan transport and freight logistics companies make a huge contribution to the country’s revenue.

The freight logistics industry plays a crucial role in the economy, particularly through customs clearance, which facilitates tax collection. Industry captains serve as agents of the Uganda Revenue Authority (URA), ensuring compliance and revenue generation.

The UFFA advisory board member and former chairman, Hussein Kidede, said that UFFA contributes over 85% of the freight logistics movements in Uganda.

UFFA membership includes companies involved with freight logistics, including customs clearance, transport, shipping, freight terminals, and warehouses, among others.

UFFA Chairman Mwebembezi emphasized that the association plays a vital role in tax collection, saying that without their involvement, URA would face significant challenges executing its mandate, as freight forwarders facilitate the process by interacting directly with importers and exporters.

“We work hand in hand with URA. Without us, I think URA may not be able to do much, because we facilitate; we are the ones who interact with the customers, the importers, and the exporters. So, we facilitate the government in collecting revenue. That’s why, when I was starting, I said we contribute a certain percentage as Uganda Freight Forwarders, and we put it around 80%. So, I think ours is facilitation… We are the ones that URA depends on to collect taxes,” he said.

James Malinzi, Assistant Commissioner Risk Management in the Customs Department at URA, who represented Commissioner Customs, acknowledged the crucial role played by the clearing and forwarding fraternity in tax collection.

“There is no custom collection that can be collected without the involvement of freight and forwarding, and if we are looking at their contribution, then they are contributing around 35% to the collection of our national target we have. It is only the 65% that they don’t touch because most of them may not be directly involved in the domestic tax. That is their contribution as far as our collection is concerned. In all the customs collections, these people are involved,” he said.

PROFESSIONALIZING UGANDA’S FREIGHT AND LOGISTICS INDUSTRY WITH FIATA DIPLOMA

The freight and logistics industry in Uganda has taken significant steps toward professionalizing its operations, with the Uganda Freight Forwarders Association leading several initiatives to enhance the sector’s standards.

On March 10, UFFA launched the first cohort of the International Federation of Freight Forwarders Associations (FIATA) Diploma, marking a milestone in elevating the industry’s standards within Uganda.

The FIATA diploma, a global certification, is recognized in over 100 countries, providing Ugandan professionals with an international qualification.

“We are elevating our people to become professionals in the industry and also practice beyond customs brokerage,” said UFFA advisory board member and former chairman, Hussein Kidede.

In addition to the FIATA diploma, UFFA has been integral to the growth of the industry in Uganda through the East African Community Customs Freight Forwarding Practicing Certificate.

Over the past 15 years, this regional program has enabled UFFA to train more than 2,500 practitioners, helping to shape a well-educated workforce in the freight logistics sector. The program is a collaboration between the freight industry and revenue authorities, ensuring that professionals are trained in customs procedures and equipped to meet international industry standards.