CORONA WAKEUP CALL TO UGANDA’S ENERGY SECTOR
The Coronavirus pandemic has sharply brought out key factors that Uganda must address as a matter of urgency immediately and sustainably after the outbreak. The first is obviously preventive health care. The second, which must be having national planners already thinking hard, is energy sources, supply, and use.
On Tuesday 24th March, Finance Minister Matia Kasaija alerted Parliament to a potentially looming crisis of fuel supply. According to the minister, the country’s fuel reserves at Jinja are drying up fast. The matter was made the more serious because the fuel imports through Mombasa were also dwindling. So, the minister promised the House, he was engaging the Kenyan authorities with a view to having an increase in fuel imports destined to Uganda.
Slavery to Mombasa
What the minister did not add, probably because the occasion was not right, was that there were also issues with the Kenya Revenue Authority that were affecting the neighbor’s attitude to Uganda bound imports. Whatever the case, landlocked countries like Uganda are internationally obligated to maintain fuel reserves that can keep the country running for several months. This is because even if you enjoy the best of relations with your transit neighbor to the sea, conditions that are beyond their control can disrupt their capacity to provide you with access. Uganda has seen both scenarios with Kenya – having its fuel supply cut off both when authorities in Nairobi were hostile and also when they were friendly to Kampala. The hostility-induced blockades were experienced in 1976 when Uganda’s president Idi Amin made reference to the old frontiers which Nairobi deemed to be a threat to its territorial integrity, and the second was in 1987 when Kampala’s push to revive industrial production and demands to use rail more than the road for transit goods were perceived as a threat to Kenya’s economy. Then in 2007-2008, Kenya’s own problems of election violence caused a crisis that blocked the movement of supplies to Uganda, which country was ironically at the same time providing humanitarian assistance and immediate safety to fleeing Kenyans.
The absurdity of unconsumed power
Today it is Coronavirus. Not only are Uganda’s overseas suppliers experiencing lockdowns but Kenya itself is also under partial lockdown and curfew. But these problems are just occasioning the immediate manifestations of the problem. The bigger and deeper problem is that Uganda is a heavily import-based economy, importing $7billion worth of goods and exporting only over $2billion worth. The biggest sources of foreign earnings – tourism and remittances from nationals working outside are virtually at a standstill. Yet demand for petrol is not about to subside as there is an increased use of personal cars which moreover are only allowed to carry a maximum of three persons including the driver.
The main problem arising out of this is not just an accounting unfavorable trade balance; the danger is that the country imports even the most basic needs like energy. So any hitch in imports triggers a crisis! This poor country spends $1.3billion a year on petroleum imports but should this financial hemorrhage stop for whatever reason, the country gasps and immediately grinds to a halt. For the entire ground, transport is dependent on Internal Combustion Engines in private cars, boda boda bikes, public service minibusses, buses, and even the few rail locomotives use diesel. Marine vessels are also driven by petrol.
So besides fighting disease and maintaining food production, the most urgent business landlocked Uganda must engage in is developing alternative energy sources. This actually is already underway, but it is not being coordinated properly, or even consciously. The country has invested heavily in electricity generation and then what? Half of it remains unconsumed and yet, irony of ironies, it is being paid for by the same impoverished economy because the power dams are being built with huge loans. It is a triple edged sword: You pay for generating hundreds of Megawatts of electricity in foreign exchange; you fail to consume the electricity; then you import a billion liters of petroleum using precious foreign exchange.
Quadruple win possible
Why doesn’t Uganda then use the unused six hundred or so Megawatts for which it is paying heavily to move its millions of passengers every day? Even if the passengers were not paying the fare and the private motorists were being given the electricity free of charge, at lease the country would save most of the $1.3 billion that it spends of fuel imports. But better still, the electricity should be paid for by the consumers of transport, and pay off the debt already incurred to build the power dams.
Some Ugandans have been skeptical, and understandably so, that Uganda can compete with foreign carmakers in the production of electric vehicles. But two things have happened in quick succession that has changed the question. Because of the coronavirus crisis, we now know that it is not just a matter of competing favorably with foreign manufacturers, but a matter of survival. The country needs to have a measure of control over the most strategic economic activities in this case transport. Secondly, just before the Coronavirus reached crisis levels, European Union delegates who came to Uganda on an investment mission were wowed by the superbly designed and built Ugandan electric buses which the drove in from the airport to different destinations in Kampala. Many other important Ugandans, including Members of Parliament, the Speaker herself and journalists have ridden on the Kiira EVS buses and they aver that they have not had many more pleasant rides in the country, or outside.
So the question of Uganda’s ability to make good, electric buses is already resolved. Kiira Motors in partnership with the UPDF are already designing and building electric buses that should also help decongest traffic. And now a quadruple win is possible because the Kiira Vehicles plant in Jinja is being constructed at an impressive speed and should be ready to manufacture hundreds of buses a year thus creating many jobs; reduce national expenditure on importing fuel; reduce pollution for better health and create a market for the hitherto unconsumed electricity.
So bad as Coronavirus is, it is giving Uganda the opportunity to think faster.
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