It has been argued that current regional integration efforts by East African States will foster economic development by attracting domestic and foreign private investments through the reduction or removal of tariffs and other barriers to trade. However, it is generally acknowledged that despite the reduction or removal of tariffs on trade, if freight costs and procedures remain prohibitive, they will hamper investment and trade flows by reducing returns on exported outputs as well as on imported inputs. The present study assesses the extent to which transportation costs constitute a barrier to trade within the East African Community and how they act as an implicit tax on production and imported investment inputs. The study focuses on road transit transport destined to Rwanda from the seaport of Mombasa through the Northern Transport Corridor. Findings of this study are useful for both academicians and policy makers who seek to understand issues at stake with regard to the current economic and political integration process in the East African Region which could serve as a lesson for the entire African Continent.