Mr. Deo Kayemba, the Chairman of the Uganda Manufacturers Association, has said that the Competition Bill will resolve value chain distortions in Uganda’s manufacturing sector. He made these remarks while appearing before the Parliament Committee on Trade, Tourism and Industry Committee yesterday.  

Also appearing before the committee was Mr. Jim Kabeho, the UMA Board Member and Chair to the Uganda Sugar Manufacturers Association, Mr. Richard Mubiru, the chair of the Economic subcommittee, Dr. Ezra Muhumuza Rubanda, the UMA Executive Director and the UMA policy team.

“When I assumed office in 2021, one of my objectives was to address issues related to the Competition law and policy in Uganda. I am therefore grateful that the Government listened and instituted steps to actualise it.” said Kayemba.

According the Mr. Kayemba, such a bill, if well implemented, shall address any distortions in the value chain that may be preventing small and medium enterprises (SMEs) from competing on a level playing field with larger, established companies.

Mr. Kayemba also called for the establishment of an independent tribunal which will be sufficiently financed to maintain their objectivity while handling disputes that may arise. Relatedly, he noted that the draft bill was silent on timelines for mergers, joint ventures and acquisitions. He added that the Competition Bill should provide for powers of revocation of licenses where mergers, joint ventures and acquisition companies fail to comply.

Mr. Richard Mubiru, the Chair of the UMA Economic Subcommittee also reiterated the need for speed in dispute resolution to save time for the private sector.

The Executive Director, Dr. Ezra Muhumuza Rubanda, commended steps taken by the Government to consult the manufacturing sector and pledged his commitment to working with the Parliament Committee on Trade, Tourism and Industry to have this Bill finalised and implemented.

Background:

A competition bill is a legal framework that aims to prevent monopolies and promote fair competition in a specific market or industry. The Bill includes measures such as regulating pricing, preventing discriminatory practices, and enforcing rules against anti-competitive behavior. The goal would be to protect SMEs from being driven out of the market by larger companies and to ensure that consumers have access to a wide range of products and services at fair prices.

Key Highlights of the draft Competition Bill:

• Uganda is part of the EAC Community. The EAC established the EAC Competition Act in 2006 to deliver mandate that is largely mirrored in the Competition Bill 2022

• Kenya, the largest economy in EAC established the Competition Authority of Kenya in 2010, moving in the direct footsteps of the EAC.

• The initiative by GoU to have a Competition Law is therefore plausible and consistent with the strategic aspirations of facilitating the growth of the trade sector though in a regulated manner, where all win.

• UMA is a voluntary membership Organization, with about 1500 Members, 70% of whom are SMEs, contributing 18.5% of GDP, employing about 2 million Ugandans and offering a market to 70% of electricity produced in Uganda

• Competition is bound to further grow with the deepening of integration. At the EAC level, DRC has since joined EAC. Somalia and Ethiopia are anticipated. Uganda is an active member of COMESA and part of the COMESA Free Trade Area. At a continental level, Uganda has assented to the Africa Continental Free Trade Area that has created a universal market of US$ 21.9 Billion; which affirms the degree of future competition

• The establishment of the Competition Law is an important development imperative for Uganda BUT most importantly, the EFFECTIVE and EFFICIENT implementation of the Competition Law is even MORE important since countries only integrate largely trade and Uganda shall continue being subject to global competition given the trading regime the country has already signed-up to.

• UMA submissions will thus very much mirror the strategic imperative in (vi) above.

Below is a raft of proposals that were presented to the Parliamentary Committee on Trade, Tourism and Industry

	ASPECT IN THE BILL	PROPOSAL	JUSTIFICATION
1	The purpose of the Act should be made more broader than provided under the Bill	An Act to promote and sustain, investments and innovation, fair competition in markets in Uganda; to prevent practices having an adverse effect on competition and welfare in markets in Uganda and for related matters.	Ugandan investments and innovation capacity is the bedrock for sustainable trading rest Uganda only becomes a supermarket for other producing countries
2	Clause 1(2)	We amend by including under section 2 after apply;   “so long as this action doesn’t compromise the purpose for which this Act is made”	To promote and sustain fair competition in the market.    To guard against market abuses emanating from Government officials.
2	Clause 1 (3) (a)	Any class of enterprises; if the exemption is necessary in the interest of national security, strategic national development in line with the National Development Plan (s) or public interest	National development should never be stifled by the law.
	Clause 1(3) (b)	Delete this subsection	In the event that public servants can have market interest, this is susceptible to abuse the purpose for which this law is created.
3	Clause 3-Administration of the Act	The Act shall be administered by the Competition Authority of Uganda (CAU) created under the Act for that purpose.	MTIC has serious capacity and financing constraints that have perennially undermined its deliverables. Above all, to ensure that trade regulation is EFFECTIVE, EFFICIENT for competitiveness, there is need to have a Statutory Authority that effectively discharges its duties like URA/UNBS. This is why even in Kenya; they have the Competition Authority of Kenya that discharges the very mandate envisaged as one of the key pillars of the State: www.cak.go.ke MTIC should stick to Policy formulation and oversight and leave implementation of strategic trade issues to the proposed specialized CAU which is justified even under the current rationalization of GoU since there is no other entity delivering the same mandate
4	Clause 4&5 Functions of the Ministry and Reference of the Competition Matters to Ministry in certain cases	CAU should then be the entity referred to in the Bill.	-DO-
5	Clause 6-Technical Committee (TC) on consumer protection	No need for this TC once CAU is established.	A simple TC as proposed can never be able to address current and future competition issues in the market owing to its very adhoc nature. To appreciate this, one need to know that the Competition Authority of Kenya has a robust Team of 99 Staff (74 currently available), with a budget of US$ 5.5 Million annually. No TC as proposed can thus substitute the need for a permanent, focused and specialized CAU.
6	Prohibition and abuse of dominant position-PART IV Prohibition of abuse of dominant position-Clause 10,11, 12 and 13	Implementation of the provisions should be overseen by CAU         To add to clause 10(2)  after enterprise; “from competing in the relevant market  across the entire value chain”   To amend clause 10(6)(e) to read; “uses dominance in one market, or value chain level to protect another market, or value chain level”   To amend clause 12 (2) to include under           prohibited practices; h)       Hoarding i)        Actions that monopolize raw materials and any other inputs.	-DO- Under Clause 13, such inquiry into dominant position merit efficiency in so doing which merit a specialized and focused CAU rest the typical delays associated with Ministries generally, shall undermine trade and investment.
	Prohibition and abuse of dominant position- PART IV Prohibition of abuse of dominant position- Clause 12		-DO-
7	Mergers, Acquisitions and Joint Ventures-PART V-Clause 14,15,16, 17, 18	Implementation of the provisions should be overseen by CAU	The very nature of the provisions demands timeliness in management of the critical processes that touch investments and growth of critical durable processing and value addition capacity in Uganda. This, coupled with the fact that Uganda is poised for leapfrogging into serious agro industrialization and mineral beneficiation as envisioned in NDP3; CAU becomes critical to be in place to guarantee responsiveness for business given that Uganda is already ranked very poorly by the DOING BUSINESS Publications, World Bank, year on year.
8	PART VI-Inquires and Related Matters-Clause 19,2021, 22,23, 24,25,26,27,28 and 29	Implementation of the provisions should be overseen by CAU.    Other key issues are: Inquiries envisaged under Clause 19 and 20, if by business entities, must be of such entities that demonstrate compliance to Tax, Employment, Social Security and Environmental Laws of Uganda   There are offenses and penalties created that merit effective implementation by CAU as opposed to MTIC   Appeals envisaged under Clause 27 should go to a specialized Tribunal as is the case for Tax Disputes instead of High Court	There is need to use provisions of Clause 19 and 20 of the Bill to drive corporate tax and general regulatory compliance in Uganda to promote tax base growth and general welfare improvement for Ugandans.   MTIC cannot be effective in administering penalties etc since it has never shown that pedigree.   Trade disputes require speedy resolution mechanisms. Currently, it takes on average 3-5 years to dispose-off a case at the High Court. Uganda can not afford to condemn itself to such a process in a dynamic business world where speed to market is everything.