Manufacturers want power tariffs reduced
Some of the winning exhibitors at the trade fair pose with Prime Minister Ruhakana Rugunda (with tie) Trade minister Amelia Kyambadde (5th L)and UMA chairman Amos Nzeyi (4th L) at Lugogo, Kampala, last week. Photo by Stephen Wandera
Kampala. Manufacturers want government to do something about the cost of power because it accounts for the highest cost of production.
According to Uganda Manufacturers Association (UMA) chairman Amos Nzeyi, government should consider subsidising the cost of electricity as it is the case in several countries, including India whose products are flooding the Ugandan market.
Speaking at the just concluded International Trade Fair in Kampala last week, Mr Nzeyi said: “High cost of power tariff is a challenge. We want it subsidised because it is now impacting on our competitiveness.”
He continued: “This is something that has been discussed at the highest level of government. As we wait for the grand power schemes to be commissioned, we would want to see the cost of power go down so that we are able to be competitive.”
In a separate interview, UMA executive director Kigozi Sebaggala said manufacturers are currently paying between 11 and 15 US cents per kilowatts-hour of power instead of a standard 3 to 5 US cents per kilowatts-hour.
He said for the beginning, as grand plans to increase power supply by governments take root, manufacturers will be willing to work with 9 US cents per kilowatts-hour, then 7 US cents before settling for the industry price of 3 to 5 US cents per kilowatts-hour.
If this is done, Mr Sebaggala said there will be a tremendous reduction in cost of doing business which will translate into higher productivity and affordable products.
In response, Trade minister Amelia Kyambadde said moves are underway to deal with both the availability and the cost of power which she referred to as a genuine challenge manufacturers are grappling with.
While opening an energy management symposium in Kampala last month, Daily Monitor reported Dr Rugunda as saying that efforts by government to make power cheaper and accessible are underway.
Dr Rugunda said the 600 megawatt Karuma dam is one of the major power generation projects in the country whose construction started in August 2013 and is expected to be commissioned in December 2018.
At the same event, he cited the 183 megawatt (mw) hydropower project at Isimba dam which is also under construction and is expected to be operational by the end of 2016 or early 2017.
He said construction of the 840mw Ayago hydropower project, whose feasibility study is under review, will begin as soon as funds are secured. The prime minister cited other power projects as Muzizi (44Mmw) and Agago (83mw).
At the same function, Umeme managing director Selestino Babungi said: “Our plan is to invest $1.5 billion in distribution in the next five years to lower power costs because of Karuma and Isimba hydropower plants coming on board.”
Regional comparison
According to records, Uganda’s cost of power is the highest in the region. Whereas other East African countries particularly Kenya, Tanzania and Rwanda are operating at about 10 US cents per kwh less, Uganda hovers at between 11 and 15 US cents.
