TRADE LOGISTICS PERFORMANCE IN UGANDA
1. Introduction
Globalization has expanded the need for logistics services by expanding trade and production networks between countries and building national production capabilities (Song & Lee, 2022). Logistics performance measures the ease of trade flows in the global supply chain and the components of the Logistics Performance Index (LPI) are relevant to international trade (World Bank, 2023). Although most countries focus on trade facilitation for economic growth, international competitiveness depend on the ability to manage logistics to reduce delivery time and costs between countries (Shikur, 2022; World Bank, 2023).
The 2023 Logistics Performance Index (LPI) by the World Bank indicated that South Africa has been the highest-performing country on the African continent with a score of 3.70 (World Bank, 2023). In 2018, Uganda was in 102th position with an LPI of 2.58 out of 139 countries representing a relatively poor logistics performance (Monitor, 2023; World Bank, 2020, 2023). This difference indicates that there is a significant difference in the logistics-readiness within Africa. Uganda’s LPI has been declining over time since 2012 and lower than that of the sub-Saharan African region as illustrated by Appendix 1.
With regard to the comparison of the different components or dimensions of the LPI for Uganda and the Sub-Saharan region in 2018, the scores indicate that on all the dimensions, Uganda scored lower than the Sub-Saharan region with customs and international shipments nearly having the same score. Both scores are significantly lower than those of the developed economies.
African trade is still low at 14.9% ($192.2 million) in 2023(NPA, 2025). The 4th national Development Plan highlights the opportunity to increase intra-Africa trade as a result of growing population, removal of trade barriers, expansion of cross border transport and infrastructure, and growing economies within EAC and Africa. The Plan prioritizes intra-Africa trade with the EAC and Africa Continental Free Trade Area (AfCTA) as primary markets for value addition (NPA, 2025). Improving the logistics components significantly boosts trade flows and facilitating trade has potential to increase trade by more than 10% (United Nations, 2025; Wassie et al., 2025; Yangailo, 2024).
- The study will be guided Transaction Cost theory
Transaction Cost Theory (TCT) advanced by Willliamson in the 1970s regards transaction as the most basic unit of measure and analysis and focus on how much effort, resources or cost is necessary for two parties to complete exchange (Williamson, 1979; Williamson, 1981). The theory posits that a firm is a sum of contracts put in practice in order to organize and regulate transactions. The main concern is in carrying out economic transactions based on the most efficient governance structure. Transaction costs are defined as the costs beyond the cost of the product or service that is required to exchange a product or service between two entities. It is an expense one incurs for engaging in economic exchange of a good or service. The costs include search costs, bargaining costs, and enforcement costs. The goal is to maximize transaction performance and reduce costs. The diagrammatic representation of the TCT is illustrated in Figure 1.
The theory assumes (i) bounded rationality – actors are not completely rational. Individuals peruse their own self-interest; (ii) opportunism with guile- actors can make themselves better off to the detriment of others; (iii) asset specificity – some assets can only be used to very specific purposes; and (iv) frequency of transactions – the degree of frequency ranges from occasional to recurrent.
The theory has been criticized by several authors for its failure to explain how opportunism can be reduced through alternative governance structures and failure to explain the alternative forms of organization and several organizational phenomena. The theory sees individuals as intrinsically evil with capacity to cheat and compromise in lieu of self. Opportunism with guile is bad for practice. There is uncertainty arising from its assumptions of bounded rationality and opportunism indicating that information about the past, current and future states is not perfectly known. Also, if transactions are infrequent, alternative governance structures may not be necessary or feasible.
Despite its limitations, the TCT is applicable in the organsisation of internal transactions including design of employment relations, out sourcing decisions, and supply chain management with regard to supplier selection and evaluation of frameworks. It is useful in explaining why economic transactions are organised the way they are in a modern society.
- Problem statement
The Government of Uganda has made deliberate efforts to promote trade in the region including construction of roads and ports, establishment of a one stop border posts and rehabilitation of the existing Meter Gauge Railway and purchase of modern locomotives. These initiatives aimed to modernize infrastructure, increase reliability, and enhance the efficiency of freight movement and passengers.
Despite these government efforts, logistics performance for Uganda remains poor with a logistics performance Index (LPI) of 2.58 compared to the sub-Saharan Africa with an LPI of 2.89 (World Bank, 2020). Uganda was ranked 102 out of 139 nations in the world, and it is characterized by chronic delays in customs clearance, unreliable tracking and tracing, fragmented border operations and high logistics costs (World Bank, 2020). Shipment traceability scores are less than 2.50, and clearance consists of multiple processes that increase the lead times and decrease predictability in systems (Monitor, 2023). These deficiencies in logistics performance result in long transport time, high costs of transport and transactions, vulnerability to disruptions and lower competitiveness of Ugandan exports (Ssennyonjo et al., 2022).
Even though digital visibility systems, managed borders and multi-modal transport infrastructure have been identified to boost logistic performance (Gideon et al., 2024; Samieva, 2025; Shepherd et al., 2011; Trade Mark Africa, 2024; Wassie et al., 2025) their impacts in Uganda are not evident due to poor implementation, absence of inter-agency coordination and restrictive regulatory practices. Several studies explore each aspect individually and offer little empirical evidence on the role of interagency coordination and how they influence logistics performance for trade. The determinants of logistics performance for trade in Uganda are not well studied. It’s against this background that this study will examine the effect of trade facilitation practices, multi-modal connectivity and digital visibility on trade logistics performance and the mediating role of inter-agency coordination in Uganda.
3. Objectives of the study
The purpose of the study will be to examine the influence of trade facilitation practices, multi-modal connectivity and digital visibility on inter-agency coordination and trade logistics performance in Uganda.
The objectives of the study will include:
- To assess the influence of trade facilitation practices on logistics performance for trade.
- To investigate the influence of multi-modal connectivity on logistics performance for trade.
- To examine the influence of digital visibility with regard to tracking and data sharing on logistics performance for trade.
- To examine the mediating role of inter-agency coordination between trade facilitation practices, multi-modal connectivity and digital visibility and their effect on trade logistics performance in Uganda.
4. Conceptual framework
The conceptual framework depicts the relationship between customs procedures and practises, multimodal connectivity, digital visibility and trade logistics performance. Logistics Performance for trade is the dependent variable; examined through costs to deliver, on time delivery (timeliness), reliability and the transit time. The independent variables are trade facilitation practices, multimodal connectivity and digital visibility. The relationship between the trade logistics performance and the independent variables is mediated by interagency coordination and moderated by regulatory quality and enforcement. This relationship is illustrated in Figure 1.1.
Independent variables Dependent variable
Figure 1.3: Relationship between trade facilitation, multimodal connectivity, digital visibility, interagency coordination and trade logistics performance.
Source: Developed by the researcher from literature
References
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Monitor. (2023, November 21). Brutal realities of Uganda’s logistics industry. Monitor. https://www.monitor.co.ug/uganda/business/prosper/brutal-realities-of-uganda-s-logistics-industry-4439594
NPA. (2025). Fourth National Development Plan (NDPIV) 2025/26 – 2029/30.
Samieva, M. (2025). The Role of Multi-Model Transport in Reducing Lead Times across Central Asia. Central Asian Journal of Innovations on Tourism Management and Finance, 6(4), 1371–1377. https://cajitmf.casjournal.org/index.php/CAJITMF/article/view/1001/1021
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Ssennyonjo, A., Ssengooba, F., Criel, B., Titeca, K., & Van Belle, S. (2022). ‘Writing budgets for meetings and teas?’: a multitheoretical analysis of intragovernmental coordination for multisectoral action for health in Uganda. BMJ Global Health, 7(2), e007990. https://doi.org/10.1136/bmjgh-2021-007990
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World Bank. (2020). Logistics Performance Index. https://lpi.worldbank.org/2018
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Yangailo, T. (2024). The Impact of Logistics Performance on Trade Efficiency and Economic Growth: a Global comparative Study. Economia Aziendale Online, 15(4), 733–756.
Appendicess
Appendix 1: Logistics Performance Index of Uganda and Sub-Saharan region overtime
Appendix 2: Comparison of the LPI- dimension scores for Uganda and Sub-Saharan Africa
