Uganda’s new Competition Act, in force since April 2024, has a simple but vital aim: to keep markets fair, efficient, and protect consumers from powerful firms.
The Act targets practices like predatory pricing, price squeezing, and refusals to deal. Economists call these ‘deadweight loss’-where consumers pay more for worse products and resources are wasted.
By tackling this, the law protects consumers and rewards productivity rather than dominance. But the Competition Regulations, which were operationalised on September 20, 2025, risk weakening this aim in how they treat intra-group reorganisations-reshuffles within the same corporate family.
These moves are about structure, not power. A company may merge subsidiaries, create a parent, or shift assets between sister firms.
The owners stay the same, control does not change, and markets remain unaffected. Such reorganisations often boost efficiency. They cut costs, simplify decisions, and spread risk. Economists call this lowering ‘transaction costs’-making it cheaper and easier to run a business.
So what is the problem?
The problem is Uganda still treats these harmless moves like market-shaping mergers. As commercial tax lawyers Lincoln Paul Kalema and Denis Yekoyasi Kakembo point out, this creates a ‘Type I error’: regulating behaviour with no negative effect on competition.
Beneath, the Ministry of Trade has 120 days to review notified deals. That may make sense for big acquisitions that change markets, but it is a burden for simple restructuring.
As an example, in 2019, Stanbic Uganda reorganised its banking, insurance, and brokerage units under a new holding company, Stanbic Uganda Holdings, while Standard Bank Group remained the ultimate owner. The move was operational; not a transfer of control.
Under Uganda’s narrow rules, however, such a restructuring could still be caught by the notification regime. The process wastes time and money. Firms pay legal and advisory fees even when competition is untouched. It discourages efficiency and distracts regulators from the real threats to consumers.
As the aforementioned duo of tax lawyers warn, ‘unless this is fixed, Uganda’s merger rules could punish efficiency, slow adaptation, and add costs with no public benefit.’
Are we talking about a red tape problem here?
Precisely. A law designed to make markets fairer could choke on its own red tape, holding back businesses and undermining its purpose. The tension becomes clearer when you consider what merger control is really about. At its core, the test is simple: has real control changed hands? If control shifts from one set of owners to another, the deal can reshape markets, alter competition, and deserves scrutiny. But if a restructuring leaves control with the same owners, the market is unchanged. In such cases, the transaction changes form, not effect.
Uganda’s Competition Act points in this direction. Section 15 says only ‘the person who acquires control’ must notify the ministry. Plainly read, if no new person or group gains decisive influence, there is no acquirer-and no duty to notify. This aligns with modern competition theory, which focuses on control: the power to decide budgets, investments, or market entry. A shift in control can increase concentration or shut rivals out, but an internal reshuffle does not.
For instance, MTN Uganda’s separation of its mobile money arm (MoMo) from its core telecom operations was about efficiency; not a transfer of control.
The Competition Regulations, however, complicate this logic. Regulation 31(2) exempts only deals between a holding company and wholly owned subsidiaries, or mergers among subsidiaries wholly owned by the same parent. The Companies Act defines subsidiaries strictly, by shareholding or board control.
This narrow test means many ordinary reorganisations-creating a new holding company, shifting assets between sister firms, or merging businesses owned by the same people-may still require notification even when control never changes.
In the energy sector, for example, Umeme and TotalEnergies Uganda have restructured subsidiaries to ring-fence assets or manage project financing, but the same global parent remained in control.
Under Uganda’s narrow carve-out, even such harmless restructurings could be treated as notifiable mergers, despite having no competitive impact. This narrow rule makes little economic sense.
Most tax lawyers consulted for this article agree that internal restructurings that don’t alter control should not be treated like takeovers. So, yes, the Competition Act was meant to sharpen markets, but risks being dulled by red tape.
What is the cost of overreach?
Notified deals face long regulatory reviews, even when nothing about competition changes. As Kakembo and Kalema note, ‘subjecting internal reorganisations to this review timeline may cause unnecessary delays, especially where the objective is cost reduction or operational efficiency.’
In practice, moves meant simply to make a business run better-cutting costs, simplifying structure, or shifting assets-can be stalled for months waiting for approval. That delay breeds uncertainty across the organisation, hurting morale, slowing decisions, and even shaping how investors and the market view the company.
The financial cost is just as heavy. Even when there is no real risk to competition, firms must still pay lawyers, consultants, and compliance teams. As the aforementioned duo of commercial lawyers explain, ‘the cost of securing approval for a transaction that does not alter competition places an undue burden on the parties involved.’
These are wasted costs, because the same people remain in control before and after the reorganisation, and consumers see no change. For example, when CiplaQCIL, a leading Ugandan pharmaceutical maker, restructured to separate production and distribution, ultimate control never shifted yet, under current rules, such a move could still be treated as notifiable.
The real danger is that the law punishes efficiency instead of promoting it. Companies may avoid reorganisations that could make them leaner and more competitive, simply to escape the red tape.
Economically, this is wasteful. It creates what is called a regulatory ‘deadweight loss’: resources are drained into bureaucracy rather than invested in growth, innovation, or lowering prices.
Instead of advancing the Competition Act’s mission to promote competition and protect consumers, over-regulating intra-group restructurings risks doing the opposite. It adds cost, delay, and uncertainty without delivering any real benefit to the public.
So is Uganda out of step?
Indeed. The challenge is not only within Uganda; it is also about how the country fits into the wider region. By keeping only a narrow exemption for internal reorganisations, Uganda looks out of step with its neighbours.
In 2023, the East African Community (EAC) revised its Competition Act to clarify that a merger exists only when there is a real change of control. Internal reshuffles-for example, when Kenya Commercial Bank (KCB) shifts assets between subsidiaries without changing ownership-are no longer treated as mergers.
As Kalema and Kakembo note, ‘these transactions do not alter market dynamics or consolidate market power and, therefore, raise no competition concerns.’
This reform aligned the EAC with modern global practice, where the test is not paperwork but whether power actually moves to new hands. The Common Market for Eastern and Southern Africa (Comesa) has followed the same approach for years. Its regulations define a merger as the acquisition of a controlling interest, and its guidelines state clearly that internal reorganisations under the same ultimate owner do not need to be reported.
In practice, this means that across the Comesa bloc, companies-from Ethiopian Airlines restructuring subsidiaries in Addis to Safaricom reshaping operations in Nairobi-can reorganise freely so long as control does not shift.
Uganda, however, has held onto a much narrower carve-out. Regulation 31(2) exempts only mergers between a holding company and its wholly owned subsidiaries, or among subsidiaries wholly owned by the same parent.
This strict rule means that many common reorganisations-like moving assets between sister firms or inserting a new holding company-could still require notification even when control remains unchanged.
For example, when Uganda Breweries Ltd (UBL), part of the East African Breweries (EABL) group, shifts operations between entities under the same parent, Diageo remains the ultimate owner.
Yet under Uganda’s current approach, such a restructuring could still need clearance, despite no change in control. The result is that Uganda now demands notifications for transactions its regional partners-even major international blocs-have already excluded. For cross-border businesses, this creates unnecessary friction. A deal exempt in Nairobi or Lusaka might still need approval in Kampala, adding cost, delay, and uncertainty-without any impact on competition or consumers.
Any signs of a revamp then?
One of the proposals put on fore from a couple of commercial and tax attorneys consulted for this article is to make the rules clearer and align them with international best practice. The Competition Act already points in the right direction: under section 15, only deals where control actually changes hands should require notification.
What Uganda now needs is a clear statement from the Ministry of Trade confirming that if ultimate control does not change, there is no duty to notify.
This would reassure businesses that ordinary reorganisations-like merging two subsidiaries or shifting assets within the same group-will not be penalised or delayed. Plus, the Competition Regulations need to reflect how companies operate in practice. As Kakembo and Kalema note, ‘internal reorganisations generally do not result in a change in ownership or control.they do not increase the market share of the undertakings involved and have no impact on competition.’
Limiting exemptions to wholly-owned subsidiaries is considered ‘too restrictive.’ Many do argue that a better approach is to exclude all restructurings within a corporate group where the same people remain in charge.
‘For the rare cases where uncertainty remains, there should be a quicker way to get clarity. The law already allows companies to ask the Ministry for an advisory opinion. But unless this process is faster and more predictable, it risks creating the very delays it was meant to prevent,’ Kakembo notes.
‘A fast-track system-one that provides clear answers within days or weeks-would let firms proceed confidently, while still allowing regulators to step in where there is a real risk to competition,’ he adds.
If these reforms are made, the Ministry could focus its limited resources on the transactions that truly matter – those that consolidate power, reshape industries, or threaten consumer welfare.
Companies, meanwhile, would retain the flexibility to reorganise in ways that support efficiency and growth. In this way, the Competition Act would remain true to its purpose: protecting markets and consumers, without drowning in red tape.
Is there an enforcement gap?
Uganda finally has a functioning legal framework for competition. The Ministry of Trade now has substantive rules to enforce the Competition Act and tackle anti-competitive conduct across the economy.
For years, regulation was fragmented. The new Competition Regulations replace that patchwork with a unified framework, aligning Uganda with the EAC, Comesa and global practice.
The real test is not the law on paper, but whether it is enforced effectively and without strangling efficiency. The first challenge is overlapping mandates. Sector regulators already police competition, but Section 6 of the Competition Act gives the Trade Ministry ultimate authority when market-wide effects are at stake.
As Aziz Kitaka, a lawyer who has taken legal action against various brands violation of consumer protection laws and engagement in anti-competitive practices warns: ‘Without inter-agency cooperation, particularly when competition matters are referred to the Trade Ministry, there is a risk of duplication of mandates, conflicting decisions, and regulatory uncertainty.’
The second challenge is capacity. Competition law is technical, demanding legal, economic, and investigative expertise. Yet the Trade Ministry remains under-resourced.
Kitaka, who is also the founder of AdLegal Uganda, a consumer advocacy notes: ‘Enforcement of the Regulations is likely to face significant practical challenges due to the current capacity constraints of the ministry and the Technical Committee. Limited expertise in competition law and economics, delays in appointing Technical Committee members, and potential funding constraints. may hinder timely enforcement.’
So, the cracks are already visible?
In the assessment of Kitaka? Definitely. He says: ‘At AdLegal, we have already tested this scenario: we filed a complaint with the Trade Ministry, yet no progress has been made to date.’
He adds: ‘Currently, the competition enforcement docket rests with the Department of the Ag Commissioner for Internal Trade, Mr Kalega Zackey, who is effectively a one-person team.’
Uganda has already felt the costs of weak oversight. In 2013, Airtel’s takeover of Warid Telecom reshaped the market but passed with minimal scrutiny, raising concerns about concentration and consumer impact.
More recently, price spikes in fuel and cement-often blamed on a handful of dominant players-have hit households and small businesses. These cases show why competition law matters: it is not abstract, it directly shapes what Ugandans pay and what choices they have.
Yet another danger lurks on the other side: over-regulation. The Act’s merger control rules risk treating harmless internal reorganisations as if they were market-shifting takeovers.
As the Competition Regulations stand, only a narrow set of intra-group transactions are exempt. Competition law is meant to protect markets, not punish efficiency.
Kenya’s Competition Authority and South Africa’s Competition Commission show what strong, targeted enforcement can achieve. But if Uganda spreads its limited resources too thin – chasing internal restructurings while lacking the muscle to tackle cartels or dominance – the law looks to choke on its own red tape.
Uganda’s Competition Act was meant to strengthen markets, not strangle them. The true test now is whether the country embraces the modern ‘control standard’: focusing only on deals where real power shifts hands.
The Competition law was meant to guard consumers, but, unless it embraces the control standard, it may end up guarding nothing but its own bureaucracy.