Charcoal Smuggling from Tanzania Fuels Illicit Financial Flows, Drains Revenue

By Wilson Kutamba
KYOTERA/RAKAI/ISINGIRO

Authorities in Uganda’s southern border districts are grappling with a sophisticated charcoal smuggling network that fuels illicit financial flows (IFFs), drains state revenue, and accelerates environmental degradation on both sides of the Uganda–Tanzania border.

Forestry and natural resources officials in Kyotera, Rakai, and Isingiro report that this illicit trade has become one of the most persistent cross-border economic crimes.

The informal cross-border charcoal trade—once considered a survival strategy for rural traders—has evolved into a well-organised smuggling enterprise.

Exploiting over 1,500 porous border points, charcoal traffickers manipulate loopholes in Uganda’s and Tanzania’s enforcement systems, paying bribes and falsifying paperwork to illegally transport large volumes of charcoal. The result is a massive loss of tax revenue, unchecked deforestation, and the entrenchment of criminal networks that fuel illicit financial flows between the two countries.

Despite regulatory bans and permit systems meant to control the trade, the demand for charcoal remains high in Uganda’s urban centres, especially Kampala. Many households and small businesses depend on charcoal for daily cooking due to limited access to cleaner, more affordable alternatives.

“Charcoal is easy to store, relatively affordable, and provides a consistent heat source. Many people prefer it over firewood, electricity, or gas,” said Sadic Katende, a former charcoal smuggler turned environmentalist.

According to the UN Food and Agriculture Organization (FAO), charcoal remains a primary energy source across East Africa, particularly in low-income households where electricity is unreliable or prohibitively expensive. This strong market demand has created lucrative incentives for smugglers.

In Uganda, charcoal exports are banned under the External Trade Act (1953, amended 1987), and reinforced by the East African Community (EAC) Customs Management Act (2004). While the laws prohibit export, they do not explicitly bar imports, creating a grey area that traffickers exploit by mislabelling Tanzanian charcoal as Ugandan in origin.

“Dealers come with forest transportation documents from other districts claiming the charcoal is locally sourced,” said Henry Kamulasi Gabigogo, Forestry Officer in Rakai District. “It’s extremely difficult to prove otherwise unless we catch them at the border.”

On the Tanzanian side, vast woodland areas in regions bordering Uganda are being rapidly depleted to supply this demand Emma Bwengye, Natural Resources Officer in Isingiro District, said that Ugandans with capital lease land in Tanzania to harvest trees, produce charcoal, and smuggle it back into Uganda with the help of corrupt local officials.

“Charcoal production has become an organised cross-border business. Bribes are paid on both sides to ensure smooth transport,” Bwengye told Insight Post.

The financial mechanics of this operation represent a textbook example of illicit financial flows (IFFs). Global Financial Integrity states IFFs include illegally earned, transferred, or utilised money crossing borders. In this case, bribes paid to Tanzanian officials, the forgery of permits in Uganda, and the evasion of taxes and fees constitute a major leakage of public revenue.

Mr. Katende revealed that he and seven partners moved 1,280 sacks of charcoal weekly while active. Each bag cost UGX. 40,000 on the Ugandan market, generating an estimated UGX. 57.6 million Weekly—none of it taxed.

“We paid Tanzanian security officers UGX. 100,000 to 200,000 per truck, then bribed Ugandan forestry officers to get movement permits under false pretences,” he said. “Not a single coin went to official revenue collection.”

Uganda’s forestry regulations stipulate a UGX. 62,000 movement permit for a lorry and UGX. 40,000 for a Canter tipper truck. However, these official costs are often sidestepped entirely, or augmented with under-the-table payments, further institutionalising corruption within the enforcement system.

Despite some seizures, the system remains porous. From January to March 2025, four trucks were intercepted along official routes in Isingiro district, impounded, and fined Shs. 3.84 million. The charcoal onboard was valued at UGX. 25 million.

 Issa Katwesigye, Assistant Commissioner for Forestry Regulation, stated that, “It is very difficult to quantify lost revenue, but we try through check points in districts along the border of Tanzania for dealers to at least pay movement permit fees, which are UGX 62000 for a lorry and UGX 40,000 for a Canter Tipper,” he said, adding that efforts are there but still futile to crack down on this illegal business due to a lack of manpower and financial constraints to aid enforcers in their work.

Local leaders paint an even bleaker picture. Abel Muhwezi, Chairperson of Local Council 1 of Kamuli village in Rakai District—a major transit point—estimates that 20 Fuso trucks carrying charcoal enter Uganda every week through his area alone.

Each truck typically carries 160 to 170 sacks of charcoal. At current Ugandan prices of UGX. 30,000 to 40,000 per sack, the weekly value of the smuggled charcoal exceeds UGX. 100 million.

“Tanzanian charcoal is preferred because it burns longer and hotter. The market demand is huge,” said Muhwezi. “But if this continues unchecked, Tanzania’s forests will be gone, just like ours.”

^{_{Sacks of charcoal neglected after owners ran into hiding, evading arrest by NFA officials in Kamuli, Rakai district along the Tanzania border- By Wilson Kutamba}}

Deforestation is a shared concern. Between 2015 and 2020, Tanzania lost nearly 470,000 hectares of forest annually—1.16 million acres—much of it to wood-fuel production, according to FAO.

“Illegal logging and charcoal smuggling have destroyed forest cover in border regions,” said Johary Kachwamba, Communications Manager at the Tanzania Forest Services Agency.

“Despite efforts to regulate forest product harvesting , rampant illegal logging and charcoal smuggling persists , with unscrupulous loggers evading license fees and exploiting porous borders to transport contraband through boda-bodas, tipper trucks  into Uganda ,” Kachwamba told this reporter in a phone interview adding that this has depleted forest cover in Tanzania particularly along Ugandan border. 

Although exact figures on the total loss from charcoal smuggling remain unavailable due to the clandestine nature of the trade, rough estimates based on field observations and journalist calculations offer insight into the scale of the problem. The trade largely escapes formal tracking because of forged documents, informal payments, and the exploitation of more than 1,500 porous border points.

However, information gathered from multiple sources in the Rakai, Kyotera, and Isingiro districts estimates that at least 20 Fuso trucks cross into Uganda weekly, each carrying approximately 160 sacks of charcoal. Each sack is valued at an average of UGX 35,000, making the total weekly market value of this smuggled charcoal around UGX 112 million.

If properly regulated and taxed, the government could potentially collect an estimated UGX. 25 million per week in permits, taxes, and VAT. This amounts to a projected annual revenue loss of over UGX. 1.3 billion, highlighting the significant economic leakage associated with illicit charcoal flows.

Environmentalists warn Uganda already faces an ecosystem collapse due to years of unregulated charcoal production. With Tanzania now bearing the brunt of deforestation, urgent bilateral action is needed.

The charcoal trade also exploits labour from marginalised populations. In a troubling revelation, Jalia Nabasumba, a charcoal dealer, admitted that producers often rely on refugees from Nakivale Refugee Camp in Isingiro District to cut trees and produce charcoal in Tanzanian forests.

These labourers—desperate for income—are transported across borders and paid minimal wages, despite working in harsh and sometimes illegal conditions.

“It’s modern slavery, fuelled by the charcoal market,” said Katende. “Refugees are vulnerable and easy to exploit.”

Charcoal continues to dominate as a household energy source across Uganda and Tanzania because it is readily available, relatively cheap, and easy to transport and store. For many low-income families, especially in urban slums and rural areas, electricity and cooking gas remain unaffordable or inaccessible. Even in middle-income households, charcoal is preferred for certain traditional meals due to its flavour and consistency.

“Charcoal has become the default fuel in Uganda because the alternatives are just too expensive or unreliable,” said Bwengye.

According to Samuel Were Wandera, Executive Director of Uganda Financial Intelligence Authority (UFIA), monitoring the cross –border charcoal trade through porous borders poses significant challenges .However, the authority is working with agencies like environmental Police to combat such crimes, and efforts are underway to enhance these initiatives.

Officials across the Uganda–Tanzania border agree that more vigorous enforcement, public awareness, and regional cooperation are essential. Both countries must invest in renewable energy alternatives, digitise permit systems to reduce forgery, and conduct joint patrols to plug porous border routes.

“We need satellite tracking, community surveillance, and whistle-blower support systems,” said Katwesigye. “Otherwise, we’re fighting a fire with a cup of water.”

With charcoal smuggling costing millions in lost revenue and accelerating climate and ecological collapse, the cost of inaction is growing by the day.

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