Lack of merger law exposes consumers
Airtel recently acquired Warid. The absence of a clear consumer protection law could expose customers to exploitation. File Photo.
What you need to know:
The lack of a law that protects the public in the event of a merger could expose them to unfair competition.
The absence of a defined policy on huge business transactions, such as company mergers and acquisitions could exposes the public to selfish business interests, according to a senior government official.
Uganda has lately had a number of business mergers and acquisitions with the latest being Airtel acquiring Warid.
Other acquisitions have been seen in other sectors including banking and oil.
Mr Steven Kamukama, a senior commercial officer at the ministry of Trade, told a stake holders meeting organised by Seatini – a trade civil society advocacy, that although there are a number of policies in Uganda’s statute books, there are no definite clauses to shield the public against selfish profit seeking organisations especially in relation to large transactions including mergers or acquisition.
“Uganda has no exclusive competition laws, thus the public is not fully involved in such transactions,” he said.
However, according to analysts including Mr Moses Ogwal of Private Sector Foundation Uganda and Mr Godfrey Ssali of Uganda Manufacturers’ Association, the 2012 Competition Bill could help to close such gaps. But, the bill is yet to be discussed by either Parliament or Cabinet.
The Bill seeks to establish a Competition Commission, which will have powers to among others; protect the public from anti-competitive agreements, as well as guide business mergers and acquisitions.
It will also create tribunals to rule on anti-competitive agreements as wells as undertake studies that can help to review the country’s competitive environment.
The law if passed will allow for the control of dominant firms that in most cases breed arrogance and anti-competitive tendencies.
Amb Nathan Irumba, the Seatini chief executive officer, said in an interview last week that just a few sectors have comprehensive regulations that protect consumers in regard to exploitation.”
“Ugandans continues to demand for Consumer Protection Legislation to among other things protect them against fake and substandard goods as well as eliminate uncompetitive tendencies,” Mr Dan Marlone of Uganda Consumer Action Network said.
