Uganda Manufacturers to Demonstrate as Power Shortage Shrivels Economy
Patience is running out.
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First published: May 24, 2006
In a meeting held at UMA conference hall last Thursday evening, the manufactures said that they met President Yoweri Museveni recently who promised to solve their problem but the government is very slow in its promised response. They said that a demonstration might make the government get the message and respond more promptly.
The government had promised the manufacturers that it would reduce taxes on generators and diesel imports and consider giving incentives to those purchasing generators as the power crisis in Uganda reaches unmanageable levels with day long or night long load shedding becoming a norm due to hydro electricity shortage.
The Chairman of UMA, Abid Alam says that the manufacturers also want the government to give them a concession on the little power that is available by giving the biggest load of the power to manufacturers instead of domestic consumers. He says that domestic consumers are currently getting most of the little power.
He says while generator power is an option that can be looked forward to, it is making costs of production for most industries high, which in turn leads to increases in prices of products, thereby negatively affecting the sales and business of the manufacturers.
"There is an inevitable outcome of increasing prices. Yet when we increase prices, people will not buy. People are not buying because they don't have money. The whole economy is being affected by the power shortage," he said on Thursday.
Prices of most consumable products have already more than doubled. For example a candle which used to buy at Shs 100 now is now sold at Shs 200, sugar which was at Shs1,700 at the beginning of the year is now sold at Shs 2,700, telecommunication companies have increased airtime call rates as have several other goods and service providers.
The manufacturers expressed concern that as a result of the power crisis and increase in cost of production and the resultant increase in prices, Uganda's products, which are produced expensively, can no longer compete favorably on the international market. The power shortage is thus affecting the country's export sector and killing any hope for manufacturers to keep in business. Meanwhile the local consumers' ability to consume shrivels with increases in prices of almost every product and failure to have power, which is an enabler to consuming many goods produced.
The Bank of Uganda announced last week that the power shortage is already having an adverse effect on the economy as the government has failed to meet its projected Growth Domestic Product growth rate of 6% in the 2005/2006 financial year, only managing close to 5% growth rate.
To make matters worse, the Uganda Electricity Regulatory Authority recently announced an increase in power tariffs that will see even using the rarely available power more expensive. The prices of fuel have also been going up, making the generator option another bad business alternative for the manufacturers and business people in Kampala and other parts of the country. Many businesses have already closed down or reduced operations and employees, as most days are characterized by no work due to the absence of electricity.
The manufacturers say they need the power concession in order to be given more power so that they can produce more affordable goods and services for consumers. But the power concession is not going to be met with absolute support by the already wounded members of the public who apart from buying things expensively are increasingly unable to utilize them because of absence of power in their homes.
Bukenya Ambrose of Rubaga, in Kampala for example says he needs any additional power at his home where he recently took his computer so as to work from home since it was becoming expensive for him to rent a place and fail to work from there because there was no power on most days.
"Even though we want cheaper products, any electricity concession from domestic consumers is not welcome since it leaves us more unable even do the small tasks that bring us money. Some of us run secretarial bureaus, saloons, where we get money to buy products. Our income depends on power availability," he said in an interview.
Apart from the concern on the effect power shortage is having on shriveling the economy, there are rising environmental concerns as many people take to tree cutting to get charcoal to solve their and other consumers' power needs.
Bukenya says government should instead think of a long-term solution to the power problem other than the proposed power concession to manufacturers.
President Museveni has promised to prioritize solving the power crisis in his new government. He announced at his swearing in on May 12th 2006 that government will build 2 new hydro power dams in the next 43 months, and will import generators to provide thermal power in the near future as a short-term strategy.
It seems the stings resulting from the power shortage are felt hard from manufacturers and consumers who are almost demanding government to do the impossible in a short period of time. But it is becoming clear that as government takes time in looking for a solution to the power scarcity problem, the manufacturers and consumers are not as patient and may resort to desperate means in seeking electricity for their survival.
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First published: May 24, 2006
Gerald Businge is a media practitioner and features Editor at Ultimate Media Consult in Uganda. He is a graduate of Mass Communication and several journalism and leadership certificates. He has been a practicing journalist since March 2001 and has worked at The New Vision as features writer, and has written extensively for different newspapers, magazines, newsletters in Uganda and internationally. He currently does fulltime media communication consultancy work as well as writing and editing at Ultimate Media Consult (U) Ltd where he is a founding member and CEO. You can get his attention so long as you are interested in and you are working for a better world.