It has been officially announced, come 1^st June, electricity users in Uganda should get ready to stretch their pockets further to meet their electricity bills. For the domestic users, the tariffs have been hiked by 37%, while the heavy industries will have to cough a whooping 58% to be able to meet their electricity costs.

The issue of the acute shortage of electricity in Uganda, coupled with the increasing tariffs has attracted all kinds of reactions from the general population ranging from complete outrage, bemusement, critism, skeptism and calls for the government to remove management of power from UMEME Ltd, a joint venture between the south African based ESKOM company and CDC Globeleq , which took over power management in Uganda a year ago, and  return it to Uganda Electricity Board (UEB), the government body that was originally responsible for power distribution in the country. A majority say that power supply was more regular and the costs were manageable when UEB ran the show.

A barrage of questions and complains directed through the media to the energy sector have brought forth one answer. The water level in Lake Victoria has lowered resulting to the hydropower generation dropping from an installed capacity of 300mega watts (MW) to less than half its original capacity (135MW). An expensive emergency diesel powered thermal plant has been installed to cover some of the deficit but this has done little in covering the difference.

From what government representatives have been voicing weeks ago, the increase in power tariffs has been long predicted. During a press briefing at Nakasero, the Minister of information Nsaba Buturo said that Ugandans have to brace themselves for higher electricity bills, and prolonged load shedding for the next five years until a bigger hydro power generation dam is commissioned in Bujyagali in 2010. In the short run, cheap hydro power will be in short supply until the development and completion of the renewable energy projects. He added that for now, 1t’s being replaced with the thermal power, which is highly expensive.

The state Minister of energy Michael Werikhe also informed members of the Parliamentary Committee of Natural Resources that the Finance Ministry is not in position to allocate enough money to fund the procurement of enough thermal energy. The World Bank has pledged $100m through the international Development Association, the government is to produce over $37.8m ugshs and the deficit has to be covered through tariff adjustment to meet the cost of $295m required for investment in the energy sector.

As a result of electricity tariff increases, many of the country’s heavy and small scale industries, which are the mega taxpayers are either nearly closing down, reducing numbers of employees or hiking prices so as to meet the increased costs of electricity tariffs and running generators to power production. To protect their profit margins, the manufacturers’ increment in costs have been passed on to product consumers inevitably. The consumers have already began to feel the adverse effects of the power shortage as business men and women increase prices of their goods to stay profitable. Prices of goods are rising on a daily basis for example, a kilogram of sugar that was costing $1 two weeks ago has doubled and the same goes for cooking oil, and many of the locally manufactured goods.

UMEME has argued that previous tariffs have been low. However, considering that the current tariff rates include UMEME’s interest, this is no surprise. The Manufactures however consider the new tariff structures as imposed rate that could end up driving them out of business. Hilary Obonyo, the Director of the Uganda Manufacturers Association (UMA) during an interview with the East African said the power hikes will result into price increments, which directly translates into Uganda’s goods becoming less competitive in the regional markets.

Lamwo county Member of Parliament Hilary Onek, who also doubles as an engineer says Bujyagali is feasible, lies downstream 2 dams in Jinja and cannot solve the power problem in Uganda because by the time the dam is completed in the next five years, the demand for power in the country would have doubled. This he attributes to the “errant manner” in which water is released currently at the two dams. His recommendation is that this should be checked so as to enhance the performance of the dam when it’s commissioned.

Looking at the above scenario, what Ugandans have not been asking themselves is  whether Uganda’s power problem can only be attributed to the low water table. An online friend once commented that there must actually be something UMEME is not telling Ugandans for example, did they invest real cash into former UEB or is it a case of leveraged buy out, using the locally generated funds to pay off their obligations to Ugandan treasury? What exactly is the problem? Power is such an important sector, which forms a basis for growth in a country. Mishandling it means the whole economic sector runs out of business.

We have not recognized that ESKOM is a South African Public company, being the parent of UMEME; it directly translates to a clear cut fact that Uganda’s power is still technically publicly managed. So Ugandans have just handed over its money bag to a publicly owned firm, the only difference is that it’s in another country. Clearly, the last thing Ugandans need is their “golden jewel” being run by a public firm. We have endless money giants in the private sector, who would inject lots of cash into the energy sector, to boost production. All we need to realize is that we have the potential within not without.