Uganda’s $200m electricity subsidy gravy train

We take positions on public policy largely on emotions, bias or prejudice. Most debate on public policy in Uganda is about scoring political points, not shedding light on the issues.

Of course, there is self-interest as well. For example, the chattering classes who dominate the media, NGOs and parties are also beneficiaries of the subsidies on electricity. However, their take on this subsidy is small. Assuming someone pays Ush100,000 ($40) in electricity bills per month, it means the government pays for them Ush160,000 ($64) or Ush1.9 million ($777) a year.

Uganda’s chattering classes are avoiding this extra amount at the price of allowing corporate barons to get away with billions from the taxpayer.
Uganda’s chattering classes are as corrupt as the government officials they are wont to criticise.

For instance, in exchange for a bribe of $ 200,000 on a road project, a public official in Uganda will let a foreign contractor inflate the price by over $10 million and even turn a blind eye when the contractor does not construct the right quality of road.

This is what has made corruption in Uganda corrosive. It is also the same logic that underpins electricity subsidies.

If the Ush336 billion ($136 million) going to large corporations were going to support the rural poor, one could say the democratic process is working. If the government has made this fatal error, we would expect to hear the opposition defend the interests of the rural poor — the majority. Instead, the opposition also supports these subsidies that benefit a few.

It is little wonder that 42 per cent of voters boycotted the election last year.

The political process does not represent the interests of the vast majority of our people.

The Cabinet thus cannot marshal the courage to overcome the self-interest of its members and end these ridiculous subsidies. In reducing the subsidy by only 40 per cent, it was also being self-serving.  

Andrew Mwenda is the strategy and editorial director of the Independent magazine of Kampala. E-mail: amwenda@independent.co.ug