Uganda energy moves pose risks for the president

Subject

Political economy of energy in Uganda.

Significance

After 20 years of growth averaging 8% per annum, the Ugandan economy has begun to falter. In July, the IMF reported that 2016-17 growth had slowed to 3.9%. Both the IMF and Museveni agree that further investment in infrastructure -- especially energy infrastructure -- will help to alleviate the current pressures. However, recent experience suggests that such investments are not without risks.

Impacts

• Controversies related to the Bujagali dam will raise concerns over the viability of other hydro-electric projects.
• The depletion of the national ‘Energy Fund’ will reduce the government’s ability to mitigate the impact of shocks in the sector.
• Reduced investor confidence will undermine Uganda’s attempts to kickstart oil production.