Uganda Table of Contents

In the 1980s, local officials estimated that charcoal and fuel wood met more than 95 percent of Uganda's total energy requirements. These two materials produced 75 percent of the nation's commercial energy, and petroleum products, 21 percent; electricity provided only 3 percent of commercial energy. By the late 1980s, the government sought alternate energy sources to reduce the nation's reliance on forestry resources for fuelwood. Alternative technologies were sought for the tobacco-curing and brick and tile manufacturing industries, in particular, because they both consumed substantial quantities of fuelwood. More than 80 percent of fuelwood consumption was still in the home-- primarily for cooking--and to reduce this dependence, the government attempted to promote the manufacture and use of more fuel-efficient stoves. Even this modest effort was difficult and expensive to implement on a nationwide basis, in part because cooking methods were established by long-standing tradition.

Managing the Uganda Electricity Board (UEB) was increasingly difficult during the 1980s. Factors contributing to this problem included increased UEB operating costs and shortages of spare parts, especially conductors and transformers that had been destroyed by vandals during the war years. Supply lines were often vandalized, and oil was even drained from UEB equipment. Despite these problems, the UEB maintained the existing supply system and supplied electricity to a few new coffee factories and corn mills in the late 1980s. The demand for new connections increased, largely as a result of escalating prices of other energy sources, such as kerosene and charcoal. Electricity consumption rose by 21 percent in 1987 despite the upward adjustment of tariffs by 536 percent.

Power generation at Owen Falls dropped from 635.5 million kilowatt-hours in 1986 to 609.9 million kilowatt-hours in 1987. By November 1988, six of the station's ten generators had broken down. Officials hoped that the rehabilitation of Maziba Hydroelectric Power Station at Kabale and the Mubuku Power Scheme at Kasese would ease the pressure on the Owen Falls facilities. As of 1989, planners expected the power generated at the country's existing power station at Owen Falls to be fully used by 1995, so the government rushed to begin a six-year construction project to build a 480-megawatt capacity hydroelectric power station near Murchison (Kabalega) Falls on the Nile River. Officials hoped the new station would meet Uganda's electric power needs up to the year 2020. Environmentalists protested that this project would disrupt the ecosystem of nearby Murchison (Kabalega) National Game Park (one of Uganda's prime tourist attractions), and the government agreed to move the power station two kilometers upstream in response to these complaints.

In the 1980s Uganda imported all its petroleum products. The transportation sector consumed about 69 percent of the available supply, while the aviation and industrial sectors required 9 percent and 5 percent, respectively. Roughly 17 percent of Uganda's petroleum imports were for domestic use. Uganda relied on Kenyan road and rail systems to transport oil imports. When political relations with Kenya worsened in the 1970s, the government tried to expand the country's strategic petroleum product reserves by rehabilitating existing storage facilities and constructing new ones. By late 1989, new tanks at Jinja and Nakasongola were expected to provide a six-month oil supply cushion. Officials also changed procurement procedures for oil from an open general licensing system to the use of letters of credit. An oil board was to be established to import and store petroleum products and to supervise their distribution.

Several international companies were also exploring for oil in western Uganda in 1989. A consortium of four oil companies-- Shell, Exxon, Petrofina, and Total--had tendered bids for test drilling to determine if commercial quantities of oil were present. The World Bank provided US$5.2 million to purchase equipment and train Ugandans in drilling procedures. The major areas marked for test drilling were in Masindi, Hoima, Bundibugyo, and Kabarole. Test blocks were also set aside in the southwestern district of Kigezi and portions of Arua and Nebbi districts in the northwest.

In 1989, however, several of these companies appeared to be losing interest in Ugandan oil prospects. Shell withdrew from the consortium, leaving Petrofina operating most oil rigs and Exxon and Total providing most financial backing. Among the reasons for the declining international interest were the slump in crude oil prices worldwide and the high cost of exploring in the relatively remote western region of Uganda. Moreover, uncertain political relations between Uganda and Kenya suggested that prospects for building a trans-Kenya pipeline were becoming more remote, and shipping oil through Tanzania promised to be too costly.

More about the Economy of Uganda.

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Source: U.S. Library of Congress