Reality Check

Powering Uganda’s Transformation

Reality Check 10

This 10th edition of the Reality Check examines the role of energy as a driver and shaper of economic transformation in Uganda. The quest for decent access to affordable energy presents a major development concern today. It would be unimaginable for a country to achieve inclusive growth and sustained peace without providing access to energy, especially to electricity for all.

Introduction

This study examines the role of energy as a driver and shaper of economic transformation in Uganda. This is based on the premise that while much has been written and said about household energy access, the public discourse on energy for economic transformation has been weak in Uganda. This focus on household access is reflected in the setting of targets by government and development partners and in the advocacy work of civil society.

This publication argues that while household access is crucial to improving the population’s quality of life, providing all households with access to modern energy before they can afford to pay for it may be putting the horse before the cart. It is unlikely that access to modern energy is the immediate binding constraint to most households’ wellbeing; Ugandan households need income. Even if modern energy is the most urgent need for many Ugandan households, access without purchasing power would do little to change their situation. For example, the rise in electricity customer numbers has not translated into a proportional rise in electricity consumption. Customers increased by 117% from 2015 to 2016 while the annual growth rate in power sales was only 5%. Stakeholder interviews revealed that energy is overwhelmingly seen as a consumption good by policy and programming in Uganda, with both focusing on households as targets. For sustainable economic transformation, energy targets should be linked to production and industrial growth pathways. For instance, the National Development Plan focuses on key growth sectors, but there is little linkage between energy plans and industrialisation plans.

The Government of Uganda has expressed its commitment towards transforming the country from an agrarian low-income country to a modern upper middle-income status country by 20401, thereby lifting the vast majority of households out of poverty, giving them the purchasing power to buy more modern energy, among other things.Such a transition will require a fundamental transformation of the economy, whereby a substantial part of the labour force moves from low productivity into modern, high productivity sectors and activities. Energy is one of the fundamental building blocks of such an economic transformation. all economic activity requires energy; high productivity sectors require more, more reliable and more modern forms of energy. National Planning Authority (2013) 3POWERING UGaNDa’S TRaNSFORMaTIONEnergy access is not an end in itself. Its benefits extend to all areas of society such as agriculture, commercial activities, health, women economic empowerment, education and welfare for displaced persons. For energy to foster economic growth, its use and benefits will need to be explored independently for each of these sectors.

This report explores the relationship between energy and economic transformation in Uganda. It examines to what extent Uganda’s energy system currently drives or hinders economic transformation, identifies the greatest constraints hindering the energy system from being a driver of transformation, and explores opportunities for progress in that regard. In doing so, this report aims to contribute to fostering a richer public discourse on energy in Uganda.

The study is structured as follows. Section 2 describes the study’s methodology. Section 3 defines economic transformation and assesses Uganda’s economic transformation story and outlook. Section 4 unpacks the role of energy in driving and shaping economic transformation, globally and in Uganda. Section 5 presents an overview of the current status of Uganda’s energy sector and its performance in driving economic transformation. Sections 6 - 8 analyse the current status of energy for economic transformation in Uganda in depth, looking at electricity, biomass, and petroleum fuels respectively. Section 9 discusses the binding constraints on energy as a driver of economic transformation in Uganda. Section 10 explores several opportunities to overcome those constraints. Section 11 concludes.

 

You can download the whole report as pdf.

Contact Person

Verena Kasirye

Verena Kasirye

Programme Officer

verena.kasirye@kas.de +256 312 262 011/2

About this series

The series analyses developmental challenges in the political, social and economic sphere in Uganda. The editions examine hot topics of the daily political agenda and undertake a rigorous reality check. Reality Check is published in cooperation with Centre for Development Alternatives.

Ordering Information

Editor

Centre for Development Alternatives & Konrad-Adenauer-Stiftung e. V.