Government Proposes Railway Development Levy on Cargo

The Uganda Railways Corporation (URC) has put forth a proposal to implement a new Railway Development Levy amounting to $1.50 (approximately Shs6,000) for every tonne of cargo that enters Uganda. This levy is being championed as a critical measure to create a ring-fenced revenue stream that will be solely dedicated to financing the ambitious revitalisation and expansion of the country's national railway network, which is currently operating far below its potential, with only about 21% of the old metre-gauge lines being active.

The URC argues that this dedicated fund is necessary to improve connectivity, reduce the cost of doing business, and ultimately shift heavy cargo traffic from railroads, which is more sustainable. While the proposed levy is intended to inject life into the railway system, it is likely to face scrutiny from importers and business stakeholders concerned about the increase in transportation costs, which may ultimately be passed on to consumers.