A cabinet sitting on Wednesday Jan. 11 discussed increasing electricity tariffs by 40 percent. Cabinet should remove these subsidies altogether because they are not economically sustainable and benefit the rich at the expense of poor citizens. Over the last five years, government has paid Shs 2.0 trillion in these subsidies. This is enough money to build a 300 MW hydro electricity dam at Karuma.
Although the actual cost of a unit of electricity in Uganda is Shs 1,000, big and medium scale businesses pay only 18 percent of this price i.e. Shs 180 per unit. The government tops up the balance with Shs 820 (82 percent of the price). Meanwhile, domestic consumers (households) and small businesses pay Shs 385 per unit of electricity (38.5 percent of the price) and government pays Shs 615 for them (61.5 percent).
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