Electricity consumption below targets, says IMF
The IMF says that just under 45 percent of Uganda access electricity. Photo / File
What you need to know:
- The consumption, IMF notes, is also way below regional peers, coming far behind Kenya’s 172 kilowatts and Tanzania’s 113 kilowatts per hour, but is higher than other EAC member states.
A December 2024 report by International Monetary Fund (IMF) indicates that current electricity per capita consumption of 83 kilowatts per hour is far behind targeted average of low-income and developing countries.
The consumption, IMF notes, is also way below regional peers, coming far behind Kenya’s 172 kilowatts and Tanzania’s 113 kilowatts per hour, but is higher than other EAC member states.
IMF also notes that Uganda’s electricity access remains low at 41.3 percent, especially in rural areas, yet more than 74 percent of the population lives there.
“The objective of [government] is to ensure that 60 percent of the population have access to electricity by 2027, which will still be well below the target of universal access,” the IMF report shows, noting that given the constraints in reaching rural areas with grid, government envisages continued grid extension and measures that lower households’ cost of connection with the installation of off-grid solutions such as solar photovoltaic systems.
IMF further indicates that the current upfront grid connection costs are about $160, which is equivalent to over two months of the average income and thus not affordable to many households.
However, the report notes that government should leverage the Electricity Connection Policy, which establishes a roadmap to connect 300,000 people per year from 2018 to 2027 by subsidising consumers’ upfront connection costs.
The report also notes that besides the welfare gains from expanding electricity use among Ugandans, increasing electricity access to expand demand is crucial for the country to avoid incurring the costs of excess generation.
Uganda currently has an installed capacity of more than 2,000 magawatts. However, less than 1,000MW is consumed.
Thus, Mr Piergiorgio Carapella an economist with IMF said, even with the surplus, generation needed to rise further to support universal access.
“In the last decade of the 2030 Agenda, the population is projected to increase from 47.1 to 59.4m, and GDP per capita from$862 to $1, 221. Electricity generation will thus need to grow not only to reach the entire population, but also to account for population growth between now and 2030, and to serve increase in demand,” he said.
Rise in consumption
The IMF argues that access share, population growth, and income growth will result in a rise in electricity consumption per capita from 83 kilowatts per hour to 289 kilowatts by 2030.
Thus to expand the electricity network, it notes, government needs to invest an aggregate of $1.8b, which on an annual basis is equivalent to 0.4 percent of gross domestic product, including replacement cost.
