Is Uganda’s Weak Competition Enforcement Stifling Growth?
Ugandans persistently pay more than they should for everyday goods and services. Prices for common goods like cement remain stubbornly high, sugar markets are periodically distorted, and telecommunications tariffs show little downward pressure one would expect in a competitive economy. These outcomes are often attributed to Uganda’s small market size regional supply shocks, or global price volatility. Yet such explanations overlook a deeper and more consequential problem, the weakness of the institutions meant to discipline markets.
Currently, Uganda has a modern competition law without a modern competition authority. While Parliament enacted a Competition Act that promises to curb cartels, prevent abuse of dominance, and protect consumers, the government opted to vest enforcement in a technical committee housed within a line ministry rather than establish an independent Competition Commission. This institutional choice risks rendering the law ineffective before it has a chance to shape market behaviour.
The gazettement of the Competition Regulations in August 2025, was welcomed as a milestone. The Act prohibits collusion, regulates mergers, and empowers the state to intervene where market power is abused. However, laws do not enforce themselves. Their impact depends less on legal elegance than on the credibility, capacity, and independence of the institutions charged with implementation.
Competition policy is not a marginal administrative function. It sits at the core of economic growth, productivity, innovation, and consumer welfare. Where competition is weak, dominant firms raise prices, suppress innovation, and close entry by smaller rivals forcing them out. Where it is enforced credibly, firms are forced to compete on price and quality, investment rises, and productivity gains spread across the economy. The difference between these outcomes is rarely the wording of the statute; it is the strength of enforcement.
Uganda’s institutional design stands in sharp contrast to regional and global practice. Kenya’s Competition Authority, South Africa’s Competition Commission, and the European Union’s Directorate-General for Competition are permanent, independent bodies with clear legal mandates. They employ full-time economists, lawyers, and investigators; conduct proactive market inquiries; review mergers against transparent thresholds; and impose sanctions that alter corporate behaviour. Firms in these jurisdictions adjust conduct not because competition laws exist, but because enforcement is predictable and consequential.
By comparison, a ministry-based technical committee faces inherent limitations. Such committees are typically temporary, staffed through secondment, and embedded in bureaucratic hierarchies that are ill-suited to confront powerful commercial interests. Competition enforcement is adversarial by nature. It creates winners and losers and often pits regulators against politically connected firms. Without institutional independence, enforcement risks becoming selective, delayed, or timid.
While proponents of the current arrangement may argue that a technical committee is a pragmatic starting point. Establishing a new authority requires resources, skilled personnel, and administrative capacity. In a context of fiscal constraint, housing competition enforcement within an existing ministry may appear efficient. This argument is not without merit. However, it underestimates the long-term costs of weak enforcement and overestimates the capacity of ad hoc structures to perform technically complex regulatory functions.
The Act assigns the committee powers to investigate cartels, assess abuse of dominance, review mergers and acquisitions, adjudicate disputes, and cooperate with international counterparts. These are not clerical tasks. Merger analysis alone requires sophisticated economic modelling, sector-specific expertise, and the ability to withstand legal challenge from well-resourced firms. Experience elsewhere suggests that such functions cannot be performed sustainably without a dedicated institution with stable funding and professional staff.
Weak enforcement also creates uncertainty for investors. Firms considering mergers or acquisitions value predictable timelines, clear thresholds, and transparent decision-making. When approvals depend on an ad hoc committee subject to administrative delays or opaque procedures, transactions stall and capital looks elsewhere. Ironically, a competition law intended to improve market confidence may end up discouraging investment.
Small and medium-sized enterprises bear a disproportionate share of the cost. In concentrated markets, dominant firms can engage in exclusive dealing, predatory pricing, or collusive arrangements that shut out smaller competitors. Without a credible authority to intervene, SMEs face barriers that stifle entrepreneurship and job creation. Consumers, in turn, continue to pay higher prices for fewer choices.
Uganda does not lack institutional models to draw from. Domestically, regulators such as the Uganda Communications Commission and the Insurance Regulatory Authority demonstrate the advantages of specialised, autonomous bodies. While not without shortcomings, these institutions outperform temporary committees because they are professionalised, resourced, and at least partially insulated from day-to-day political interference. Their existence reflects a recognition that complex markets require dedicated oversight.
Regionally, Kenya’s experience is instructive. Its competition authority has investigated cartels in essential goods, reviewed high-profile mergers, and imposed substantial fines on dominant firms. The deterrent effect is tangible. Firms internalise the risk of enforcement and adjust behaviour accordingly. This is the difference between a competition regime that shapes markets and one that merely signals intent.
Evidence demonstrates that competition regulation succeeds only when backed by an independent, well-resourced, and technically empowered authority. Consider Kenya’s Competition Authority, an independent agency with enforcement authority which fined Safaricom $5.3 million for anti-competitive practices in 2021. Would Uganda’s technical committee impose such a sanction without political interference?
An ad hoc committee may lack the legal authority to impose meaningful sanctions or compel compliance. A Commission or Authority, with clear prosecutorial and adjudicative powers, would send a stronger deterrent signal to businesses engaging in price-fixing, monopolistic behavior, or exploitative mergers.
A competition framework that exists largely on paper is arguably worse than none at all. It creates the illusion of protection while allowing anti-competitive conduct to persist. In such environments, cartels operate quietly, dominant firms entrench their positions, and public trust in market reforms erodes.
What is required, therefore, is not another regulation or guideline, but an institutional correction. Parliament should amend the Competition Act to establish a permanent, independent Competition Commission or Authority. Such a body should have legal autonomy, a clearly defined enforcement mandate, and secure funding. Financing could combine parliamentary appropriations with self-generated resources such as merger filing fees, reducing dependence on annual budget negotiations.
The authority should be staffed with dedicated professionals economists, lawyers, and investigators appointed on merit and protected by fixed terms to safeguard independence. Its powers should extend beyond reactive complaint-handling to include proactive market studies in sectors characterised by persistent concentration or price rigidity. Transparency should be built into its operations through published decisions, clear merger thresholds, and predictable timelines.
Crucially, institutional independence does not imply lack of accountability. A Competition Commission should be subject to judicial review, parliamentary oversight, and public reporting requirements. Independence is not about insulating regulators from scrutiny; it is about insulating enforcement decisions from undue influence.
This debate is not an abstract exercise in governance design. It goes to the heart of whether Ugandans will continue to pay inflated prices, whether innovative firms can challenge entrenched incumbents, and whether the economy can realise the productivity gains that genuine competition delivers. Competition policy is a cornerstone of modern market economies. Treating it as a secondary administrative function sends the wrong signal to consumers, businesses, and investors alike.
Uganda has taken an important first step by enacting a Competition Act. But laws, however well drafted, do not enforce themselves. Without a strong institution to give the Act practical force, it risks becoming a paper tiger impressive in theory but ineffective in practice. If the government is serious about fair markets, competitiveness, and inclusive growth, it should invest in an authority capable of delivering them. A technical committee may serve as a stopgap. A Competition Commission is a necessity.
Blog-authored by the Centre for Economic Policy and Development Impact Evaluation (CEPDIME). Generating evidence for policy action.