Uganda’s vital law that’s long overdue

Christine Byaruhanga

What you need to know:

  • Uganda’s first foray on competition law dates to the 1990s. A Competition Bill was first tabled before  Parliament in 1998 and thereafter the draft Competition Bill, 2004, was prepared.

Uganda’s journey towards the enactment of a Competition Law has been one marred by laxity and a reactionary attitude. Although the country is a member to regional blocs that do provide for such trade legal regimes, that is, Comesa and EAC, there exists no national competition legal regime.

In fact, with the exception of South Sudan (and probably newly-admitted DRC), Uganda is the only other EAC partner state with no competition law. Burundi, Kenya, Rwanda and Tanzania all have competition laws and functional competition authorities. 

Uganda’s first foray on competition law dates to the 1990s. A Competition Bill was first tabled before  Parliament in 1998 and thereafter the draft Competition Bill, 2004, was prepared.

The said Bill was heavily criticised by the Uganda Law Reform Commission in its 2004 report, citing issues of market inquiries, which are relevant today with skyrocketing prices of many products; abuse of dominant position by enterprises including oligopolies; regulation of mergers, including market and competition assessment of mergers; consumer protection, including unfair trade practice and complaint forums; sector regulated activities sustainability concerns.

Recently,  Parliament tabled the Competition Bill,  2022, which seeks to, among others, promote and sustain fair competition and interests of consumers. It is planned that the enforcement of the eventual Act is to be supervised by the Ministry of Trade, Industries and Cooperatives.

Despite the lag in action, this remains the first time that traction has been made and is a progressive step in fostering a viable trade environment and fostering competition on a national and sub-regional level. 

World crises have showcased the fragile nature of an economy that is lacking in competition regulation.

The Covid-19 pandemic demonstrated this in the health sector, with documented price gouging (including in Uganda) and, in more present times, the effect the Russia-Ukraine war has had on the petrol prices. The question, therefore, is whether the present Bill is sufficient enough to ensure fair play and non-exploitation of consumers in Uganda.    

A number of issues need to be addressed elaborately if the tabled Competition Bill, 2022, is to achieve its goal.

Firstly, it is evident that sector regulation has not yielded as much as it should. An example is the Uganda Communications Commission, which has attempted to regulate the telecommunication industry; however issues of technical glitches on data usage to the detriment of consumers remain prevalent and unsolved. Thus the Bill needs to address the nexus between the operation of the proposed law and sector regulation possibly though MoUs. The hand of the law needs to reach into these areas at all costs. A comparative example of this effectively working is a reported decision of the Zambia Competition and Consumer Protection Commission fining MTN Zambia Ltd for similar conduct in 2017. 

Secondly, the Bill needs to deeply address issues of mergers and criteria for the approval or disapproval of the same. Mergers in Uganda are not very popular; however, positioning the economy for competition on an international level requires such streamlining and this is critical.

Lastly, the Bill ought to envisage an independent authority to enforce the law. Presently, the Bill does not; instead it presents an option of a Technical Committee on Competition and Consumer Protection.

The success of Competition Authorities in other jurisdictions including, among others, Kenya, Zambia, and South Africa (to name those in Africa) is attributable to their independence in operation coupled with funding. The sensitive and often at times political nature of matters regarding competition law calls for such independence and this should be reflected in the law.

The move by Parliament is a step in the right direction on competition regulation. However, the Competition Bill, 2022 calls for further inquiries from experts in the field and drawing of lessons from other jurisdictions. Additionally, the criticisms raised by the Uganda Law Reform Commission ought to be looked into wholesomely if Uganda, as a country, stands a chance at having a functional and effective competition legal regime.

Ms Christine Byaruhanga is an associate at Integration & Cross-Border Transactions Dept, ALP Advocates