Wetlands are one of the most threatened ecosystems in the world because more than 70% of the area worldwide has been lost since 1900. Wetland plant species rely greatly on water for seeds and propagules, which may lead to a downstream unidirectional dispersal and accumulation of genetic diversity downstream. However, several species show no support for unidirectional genetic diversity, revealing the complexity of population dynamics and gene flow in wetlands. Here, we used microsatellite loci to address how the past demographic dynamics shaped the contemporary spatial pattern in genetic diversity and population structure of Cyperus papyrus in wetlands of Southeast Africa. Using spatially explicit analysis and coalescent modelling we found no support for unidirectional dispersal. Instead, we found higher genetic diversity in populations upstream than downstream in the river basin. We also found high admixture among populations, most likely due to connections between adjacent river basins during sporadic floods, and ongoing gene flow due to bird-mediated seed dispersal. Our results suggest stepping-stone migration due to strong isolation-by-distance, but not necessarily unidirectional. Moreover, the past demographic dynamics in the Holocene shaped the current pattern of genetic diversity and structure, leading to higher genetic diversity in populations upstream of the Zambezi river basin. Our results also point to the very low genetic diversity of C. papyrus populations in Southeast Africa and the need for management and conservation strategies to guarantee the long-term persistence of the species in the region.