Uganda reviews bad laws to boost East Africa’s trade

By Charles Kazooba

Uganda is discarding all unfavourable business legal provisions and beefing up the legal framework with better ones to attract investment and facilitate Ugandan traders intending to do business, which will further step up its competitiveness.

The East Africa country is not only attempting to unlock from a colonial era legal web that discourages investment but is also amending the laws to harmonize with the Common Market Protocol.

A consultant hired by the Uganda Law Reform Commission Ms Olive Zaale Otete, a Director of Legislative Drafting and Research Consultants, has intimated that at least 20 critical legal provisions scattered in various laws that have hindered better trade have been reviewed to enable the East African Community trade as one market and compete with other regional markets.

Ms Otete told The EastAfrican after a consultative meeting on alignment of Ugandan laws with the EAC Common Market Protocol in Kampala on April 3 that they would encourage an Ominibus Bill carrying all the proposed amendments to be tabled before parliament this year.

“We are looking at laws that are robust and need overhaul. EAC Member states should look at laws that help it to compete with external markets instead of creating an environment for internal competition,” elaborated Allen Asiimwe of TradeMark East Africa.

Uganda, which is today ranked by the World Bank as the second most attractive destination in the region in doing business, is particularly overhauling the immigration law and amending the investment (code) law to stop discrimination against other East Africans and enable free movement of persons.

The Uganda Investment Code Act for instance requires that foreign investors including East Africans, who intend to engage in business, deposit $100,000 with the Bank of Uganda, which can only be released specifically for purchasing trade goods.

Under immigration, Uganda also still issues work permits to other East Africans although other partner states like Rwanda and Kenya have abandoned the practice. It is such trade barriers that are being discarded under the new legal regime.

“If trading is what we want as Uganda then we need better laws to move in tandem with the other partner states,” Prof Agasha Mugasha, the chairperson of Uganda Law Reform Commission, a body scrutinizing the country’s laws, told The EastAfrican at the same consultative meeting.

The EAC Council of Ministers directed all EAC member states to harmonize their legal regimes with the Common Market Protocol by June 30 this year.

The other laws being reviewed in Uganda include those that establish business and attract investment, which include the Companies Act, Contract Act, Business Names Registration; those that enable movement of labour like the External Trade Act and the Immigration Act; laws that regulate movement of services like the Employment Act, the Labour Union Act and Workers Compensation Act.

Details of particularly amendments remain undisclosed until various government departments have sufficiently attended to the proposals, said Ms Otete.

However, it is unlikely that Uganda, which emerged the second investment destination in the trading bloc beating Kenya, Tanzania, and Burundi in the latest World Bank survey, will meet the June 30 deadline when every other partner state is expected to have reviewed their laws.

The United Nations Economic Commission for Africa has said economic growth in East Africa is expected to remain among the fastest in Africa this year, estimating a six per cent growth rate compared to 5.6 per cent in 2012—the second highest for the continent this year.

Also, a new favourable national legal framework with a regional perspective is expected to enhance regional legislation passed by the East African Legislative Assembly.

For instance, the One Stop Border Post and the Vehicle Load Control Bills, which once passed into law, will enable movement of goods and services within East Africa are some some of the laws likely to spur the economic growth of the country.

The EAC Vehicle Overload Control Bill aims to give the region a uniform axle load limit of 56 tonnes, while the One Stop Border Posts Bill, 2012 will legislate the operation of the planned one-stop border posts.

Under the One Stop Border Post concept, all traffic would stop once in each direction of travel, facilitating faster movement of persons and goods and allow border control officers from both sides from the two partner states to conduct joint inspection.