Joshua suffered the first defeat of his professional career against Ruiz, surrendering his WBA, IBF and WBO world titles.
Muhangi said that Lugogo Indoor Arena is too small for the growing crowd.
Fifteen women and 29 men remaining on the team that had 40 men and 20 women will battle out it for slots on the national teams.
The International Olympic Committee is to deliver its verdict on May 22 on whether to keep boxing at the 2020 Tokyo Games.
The governing body's chief executive Tom Virgets insisted they had met all the requirements stipulated by the IOC.
The event attracted 400 boys and 80 girls, the biggest number of participants ever since the revamping of schools boxing two years ago.
Boxing's inclusion in Tokyo depends on the outcome of an investigation into AIBA by the IOC, which has presented the body with a list of 41 questions via...
France basked in the glow of six boxing medals in Rio, including golds for super heavyweight Tony Yoka and his now wife Estelle Mossely.
"I am looking forward to fighting world stars like Anthony Joshua,” the Ugandan heavyweight declared.
David Oduor, a debutante in the paid ranks like Kiwanuka, was brought on as a late substitute for Mwango, who Juma said had high blood pressure.
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