Will reforms make electricity inclusive?

Access to energy — specifically electricity — is critical to the wellbeing and livelihoods of people. Electricity makes it possible for small businesses to increase their productivity and enables people to transition from unhealthy and environmentally-damaging fuels like charcoal, among many other benefits.

Recognising this, Uganda undertook an ambitious reform of the electricity sector which started with the passage of the Electricity Act in 1999. In sub-Saharan Africa, Uganda was the first country to unbundle its electricity sector into separate generation, transmission, and distribution entities. In a bid to attract greater investment through the private sector, Uganda also privatised its electricity distribution, signing a landmark 20-year concession with Umeme Limited in 2005. The reforms also led to the establishment of the Electricity Regulatory Authority (ERA) as a regulator in 2000. 

These reforms have largely been viewed as successful. A 2016 World Bank study named Uganda as one of the only two countries in Africa whose electricity sector had a financially viable distribution system. The other country, according to the report, was Seychelles. ERA has also received international recognition for its effectiveness as a regulator.

While these are enviable achievements, they have come at the cost of inclusivity. Tariffs have surged in the past two decades, beginning with increases of 41 percent and 35 percent in 2006, 46 percent in 2012, and 16 percent in 2016.  This has made electricity a luxury, rather than a basic service. And the benefits that electricity brings must not only be for the rich.

Spotlight Kampala — a multi-stakeholder research initiative — has spent the past year researching the inequities that low-income communities in Kampala face in accessing and using electricity. We have found that although nearly all households and businesses in informal, “slum” communities are connected to the electricity grid in some way, residents struggle to realise the benefits of electricity for a number of reasons.  
When electricity is unaffordable, businesses cannot run, women face the health impacts of indoor air pollution, and people find alternative ways to access electricity that may not be safe.

Given the high connection costs, our research found that the majority of users in informal communities share Yaka metres, meaning that they access electricity through an intermediary like a landlord or neighbour.

 The person in charge of the metre often limits when electricity can be used, or what appliances can be used, or charges a tariff that is higher than the regulator-approved one. We also observed many instances of “affordability outages”, where users would go without power for hours, days, or even weeks because they could not afford to purchase more tokens for their Yaka metre.

We used power quality sensors to measure the voltage at two-minute intervals. The sensors revealed chronic low voltage, episodes of high voltage surges, and frequent voltage fluctuations that led to the premature breakage of appliances and disruptions to daily activities. 

The sensors, which were deployed across both formal and informal communities, showed that voltage is chronically lower in informal communities than it is in formal communities.

Due, ostensibly, to the concerns over the rising tariffs, the government last year officially notified the electricity distribution company Umeme that its concession would not be renewed at its conclusion in March 2025. 

The functions of generation, transmission and distribution look like they will once again be bundled in Uganda. Now, with a fully public power distribution utility taking over after March 2025, every consumer’s hope is that electricity will become more affordable.

We hope that Spotlight Kampala’s work will aid policymakers in understanding the unique barriers faced by Kampala’s informal communities, and result in a shared objective of more inclusive electricity services for all in order to achieve Sustainable Development Goal 7 as well as Uganda’s Vision 2040.

The author, Ms Jessica Kersey is a  PhD candidate in the Energy and Resources Group at the University of Carlifornia, Berkeley.