Papyrus wetlands around Lake Victoria, East Africa play an important role in the nutrient flows from the catchment to the lake. A dynamic model for nitrogen cycling was constructed to understand the processes contributing to nitrogen retention in the wetland and to evaluate the effects of papyrus harvesting on the nitrogen absorption capacity of the wetlands. The model had four layers: papyrus mat, water, sludge and sediment. Papyrus growth was modelled as the difference between nitrogen uptake and loss. Nitrogen uptake was modelled with a logistic equation combined with a Monod-type nitrogen limitation. Nitrogen compartments were papyrus plants, organic material in the floating mat; and total ammonia, nitrate and organic nitrogen in the water, sludge and sediment. Apart from the uptake and decay rates of the papyrus, the model included sloughing and settling of mat material into the water, mineralization of organic matter, and nitrification and diffusion of dissolved inorganic nitrogen. Literature data and field measurements were used for parameterization. The model was calibrated with data from Kirinya wetland in Jinja, Uganda which receives effluent from a municipal wastewater treatment plant. The model simulated realistic concentrations of dissolved nitrogen with a stable biomass density of papyrus and predicted accumulation of organic sludge in the wetland. Assuming that this sludge is not washed out of the wetland, the overall nitrogen retention of the wetland over a three-year period was 21.5 g N m−2 year−1 or about 25% of input. Harvesting 10, 20 and 30% of the papyrus biomass per year increased nitrogen retention capacity of the wetland to 32.3, 36.8 and 38.1 g m−2 year−1, respectively. Although the nutrient flows estimated by the model are within the ranges found in other papyrus wetlands, the model could be improved with regard to the dynamics of detrital nitrogen. Actual net retention of nitrogen in the sludge is likely to be lower than 21.5 g N m−2 year−1 because of flushing out of the sludge to the lake during the rainy season.