Uganda has announced a weighted average 1.6% power tariff cut in a bid to promote more manufacturing as the country looks to flip the export-import balance sheet.
Ruth Nankabirwa, the energy minister, told media Friday, the reduction was in line with the country’s goals of socio-economic transformation.
“The effort to reduce the end-user electricity tariff remains a key aspiration of the National Resistance Movement (NRM) government as an enabler of industrialization for social and economic transformation,” the minister said.
“As you heard in the President’s end of last year’s (2023) speech to the nation, and as laid out in the NRM Manifesto 2021-2026, the government has prioritized and is working on lowering costs to make Uganda’s products competitive in the domestic and export markets,” she added.
According to government statistics, the Tariff schedule for the Second Quarter of last year saw a reduction in Tariffs for Domestic Consumers to UGX 805.0 from UGX 808.9, Commercial Consumers to UGX 611.8 from UGX 624.6, Medium Industrial Consumers to UGX 461.8 from UGX 472.3, Large Consumers to UGX 384.4, from UGX 386.3.
However, domestic consumers will now be paying UGX792.1 per Unit, while commercial consumers will pay UGX598.9, Medium Industrial Consumers will pay UGX448.9 and Large Consumers will now pay UGX371.5.
“I congratulate you all for the announced weighted average tariff reduction of 1.6% that speaks to the government’s efforts for progressive gradual end-user tariff reduction to support industrialization for socio-economic transformation and improved welfare,” Nankabirwa said.
The minister also reveal that the President had “directed that the manufacturing sector should be supported to buy electricity directly from government power plants since the power of Kiira and Nalubaale is at 1.1 cents per US$ per unit.”
“This directive is anchored in the NRM’s commitment to reduce the cost of electricity to manufacturing and spur economic development,” she said.
The country currently produces at least 1,500MW although the Energy Policy for Uganda 2023 aims to achieve the Electricity generation capacity target of 52,481MW by 2040 with a grid access rate of 80%.
“To achieve this ambition, we will need to address the sub-sector holistically, not piecemeal. We will need to strengthen electricity generation, transmission, and distribution infrastructure while remaining alive to affordability and environmental concerns,” Nankabirwa said.
The minister also revealed that they had rolled out an exercise to ensure cheap power connectivity to all rural areas. The Government’s other goal through reducing power tariffs is discourage people from using charcoal and firewood for cooking.
