Uganda trade policy dynamics: Evidence from the COVID-19 pandemic

Abstract

This paper investigates how the COVID-19 shock reshaped Uganda’s trade-policy stance and outcomes. Merging monthly customs
micro-data from the Uganda Revenue Authority (2019-2022) with new hand-collected indicators of pandemic-era policy
interventions, we trace the evolution of tariffs, non-tariff measures (NTMs), border procedures and export-promotion incentives.
Identification exploits the staggered introduction—and subsequent easing—of lockdowns, testing mandates and cargo-priority
schemes across Uganda’s trading corridors and product lines. We find three key dynamics. First, policy volatility surged: the
cumulative count of ad-hoc NTMs (export bans, import licensing, temporary duty waivers) more than tripled between March 2020
and December 2021, with 60 % of the measures reversed or renewed at least once within six months. Second, these policies
amplified rather than attenuated the initial trade collapse: sectors subject to multiple, rapidly changing NTMs experienced export
drops that were 14–22 p.p. deeper than otherwise comparable products. Third, after mid-2021 Uganda shifted to a “recovery policy
mix,” combining streamlined border clearance, digital certificates of origin and targeted export rebates. This pivot explains 35 % of
the rebound in formal exports to the Middle East and the East African Community observed by end-2022, but had no measurable
effect on the near-complete collapse of informal cross-border trade to the Democratic Republic of Congo. Counterfactual
simulations suggest that greater policy predictability—holding the average level of restrictions constant—would have reduced
Uganda’s pandemic-era trade deficit by roughly one-fifth. Overall, the findings highlight that the dynamics of trade policy, not just its
average restrictiveness, are critical for resilience during global shocks.

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