Industrialists urged to be patient as electricity subsidy delays

Industrialists have been advised to exercise patience as the implementation of a long-awaited electricity subsidy faces continued technical challenges. Despite a presidential directive issued several years ago to charge manufacturers only USD 5 per unit of electricity consumed, the subsidy remains elusive.

The directive, aimed at reducing operational costs for manufacturers and enhancing their competitiveness, aligns with the objectives of Uganda’s third national development plan. However, its implementation has been hindered by various factors.

During an inspection visit to the Roofings Steel Manufacturing plant on August 23, 2024, Finance Minister, Mr Matia Kasaijja explained that the private ownership of Uganda’s electricity supply complicates the implementation of certain programs. He expressed hope that the government’s planned takeover of the entire electricity distribution value chain would facilitate the introduction of the USD 5 cents per unit tariff.

“What is delaying mainly is you know electricity is going to be taken over by a government entity. Electricity is majorly in the hands of a private group of people. When the franchise is bought back, we will determine how to price electricity,” he said.

State Minister for Finance, Ms Evelyn Anite noted that some progress has been made in extending the subsidy to manufacturers. However, she emphasized that priority has been given to extra-large-scale corporate organizations, which currently benefit from this rate only during off-peak hours.

Starting from March 31, 2025, the Uganda Electricity Distribution Company (UECCL) will take over the management of electricity distribution in the country.

Written by Barbra Anyait