Uganda has been urged to hasten the creation of a competition and consumer protection entity to improve the country’s competitiveness in the Common Market for Eastern and Southern Africa (COMESA).
George Lipimile, the COMESA CC director and Chief Executive Officer (CEO) pointed out during training for media in Nairobi that Uganda is the only country in the East African Community without a competition body.
Earlier, he had revealed that the CCC is holding over $1m (about sh3.7b) that is due to Uganda from notification fees from mergers and acquisitions that involve firms that have operations in the country.
Uganda’s Consumer Protection and Competition Bill was approved by Cabinet in November 2015 but the bill is gathering cobwebs in Parliament’s coffers.
Uganda is one of the countries with the highest merger activity in COMESA but the country is missing out on notification fees.
Lipimile noted that the COMESA CC has collected $30m (about sh110.5b) since 2013 when the body started operations. “Competition authorities are self-financing.
Unlike other government agencies, this institution will be able to contribute to the national budget,” Lipimile said.
“Competitive markets provide a strong incentive for achieving economic efficiency. Competitive markets ensure that goods that the consumers want are produced using the most efficient production methods,” he added.
Patrick Okilangole, the COMESA CC board chairman noted that better competition will enhance intra-regional trade by ensuring that quality of products goes up while maintaining market friendly prices.
He said that competition has positive effects on innovation, productivity, foreign direct investment, and economic growth, as shown by various empirical studies in COMESA member states.
“Empirical studies found that in several of our member states suggest that firms facing more competitive pressure are more likely to have introduced new products and upgraded existing product lines,” Okilangole said.
However, he pointed out that several member states still harbour rules which prohibit competitive access to essential business services.
The common forms of prohibitive measures include excessive license requirements relating to essential local business services such as banking and related financial services, communications, transport, and energy.
Okilangole pointed out that uncompetitive behavior such as firm collusion, market foreclosure, and discrimination against new entrants limit firms’ competitiveness and affordability of key consumer goods.
He also pointed out that self-regulation imposed by business associations, particularly in the service sectors, lessens competition by either restricting entry or aiding members in coordinating prices.
“Horizontal price agreements such as price-fixing, market sharing, and bid-rigging are among the most common anti-competitive practices in the Common Market,” Okilangole said.
By New Vision