The week has been eventful. From Government seeking an extra Shs600b in Covid-19 response, to Electricity regulatory Authority cutting power tariffs and UPDF taking over road construction productions. Here is what made big news in the week.

UPDF to take up road construction projects

Uganda People’s Defence Forces (UPDF), under its commercial arm – the National Enterprise Corporation will now undertake road construction and maintenance projects. This is according to a statement released by the Uganda National Roads Authority (UNRA) on July 9.

“Pursuant to a Presidential directive, the Uganda National Roads Authority (UNRA) signed a Memorandum of Understanding (MOU) with the National Enterprise Corporation (NEC) – the commercial arm of the Uganda People’s Defence Forces (UPDF) with the objective of building the capacity of NEC to undertake road construction and maintenance projects,” a UNRA statement reads in part.

Large industries to benefit as ERA reduces power tariffs

Umeme has reduced the cost of electricity to the domestic user by Shs3 and 4 cents per unit effective July, for the next three months.
This is after the Electricity Regulatory Authority (ERA) approved new End-User Tariffs to be charged by Umeme Limited for the supply of Electrical Energy in the Billing Period from July to September 2021.

Apart from the street lighting category whose cost remains at 370 Shillings, the End-User Tariffs schedule indicates a reduction across all the Consumer Categories.

According to the New Tariffs, Domestic Consumers will still pay 250 Shillings for the First 15 Units under the Lifeline Tariff and thereafter pay 747.5 Shillings for the next Units purchased.

This is lower than the 750.9 Shillings which has been charged in the previous quarters.
Commercial Consumers will pay 616.6 Shillings, which is 23.2 Shillings down from the tariff for the quarter ended June.

The Medium Industrial Consumers have got the largest decrease 29.1 Shillings in the cost of the electricity they will be using, which now falls to 526.9, while the large Industrial Consumers will pay 355 Shillings, a drop of 6 Shillings.

The Extra-large industrial category consumers will pay 300.2 Shillings which is less than the previous by 1.5 Shillings. 

The approved Electricity End-User Tariffs represent a Weighted Average Reduction of 2 per cent, relative to the Tariffs of the Second Quarter of 2021. 

The Commercial Consumers and Medium Industrial Consumers are the biggest direct beneficiaries of the reduction in Tariffs, with an average reduction of 26.15 Shillings per unit. 

Uganda revives Port Bell- Mwanza cargo route 17 years Later

Uganda has resumed shipping of petroleum products through Port Bell in Luzira from Mwanza in Tanzania.

MV Kaawa, a marine vessel carrying 50,000 litres of fuel docked at Port Bell en route from Mwanza on Wednesday, as part of the test project for the route.

The consignment was received by the Uganda Railways Corporation officials and State minister for Transport Fred Byamukama.  The fuel cargo that arrived on Wednesday is the first in 17 years and according to government, efforts are in high gear to resume marine transport as well as the revival of the central corridor route.

Byamukama said Uganda has been fully dependent on the Northern corridor for its fuel supplies, with the new route providing an alternative for flammable imports from the Indian Ocean.  He said the route through Mwanza is critical in reducing congestion on the roads, and reducing the wear and tear of the roads, hence saving the government billions in repair and reconstruction costs. 

He said the move is part of Uganda’s vision 2040 which lays out the railway sub-sector as key in modernizing the economy through transforming the transport sector.

Byamukama added that since the route was generally opened two years ago, both business and bilateral relations between Uganda and Tanzania have improved significantly.  

Budget for travel, workshops frozen as govt releases Shs5.7 trillion for 1st quarter of new financial year

The government has put a freeze on travel abroad, workshops and seminars for government agencies and departments in a bid to concentrate on funding the Covid-19 response in the first quarter of the Financial Year 2021/2022.

While announcing the release of Shs5.673 trillion for the first quarter of the financial year on Tuesday, 06 July 2021, Deputy Secretary to the Treasury Patrick Ocailap said the funding cuts are as a consequence of projected shortfall in revenue of Shs2 trillion and the need to respond to the COVID-19 emergency through a supplementary of Shs 600 billion.

“Budgets of MDAs have been suppressed by up to 41.2%. This includes freeze on travel abroad, workshops & seminars,” he said.

The allocations are as follows; Local Government grants – Shs578 billion, Domestic Arrears- Shs435.4 billion, Health Institutions – Shs373 billion, UNRA- Shs 250.1 billion, Uganda Road Fund- Shs74.87 billion; SAGE- Shs30.3 billion; UWEP- Shs 7.3 billion; and Emyooga-  Shs50 billion.

Mr Ocailap said the release for the first quarter has catered for requirement to increase Nurses and Midwives lunch allowances (Shs32.3 billion) and operationalisation of cancer reference laboratory (Shs7.3 billion).

Under health, supplementary of Shs206 billion will cater for provision of oxygen, logistics, infrastructure which includes beds, ICUs and HDUs.

The Shs5.673 trillion represents 25% of approved budget minus external financing and public debt.

Govt seeks another Shs600b for Covid-19 response

Government is now seeking Shs600 billion to mitigate the devastating effects of the second wave of Covid-19.  

Cabinet approved the supplementary expenditure of which Shs371.7 Billion will finance COVID-19 interventions under various institutions in first quarter of the new financial year while Shs228.3 Billion will cater for contingencies.
The Deputy Secretary to the Treasury, Mr Patrick Ocailap, revealed that the money will be obtained through budget cuts from different Ministries, Departments and Agencies (MDAs). 

“The budget was passed before lockdown. The lockdown was in June, but the budget was passed in May. We didn’t know that this [lockdown and catastrophic effects of Covid-19] was coming,” Mr Ocailap said.

He said of the Shs600 billion emergency fund, the health sector will receive Shs206 billion to increase Covid-19 fight while Shs50 billion will go to security to enforce Covid-19 prevention measures and conduct related activities.

 IMF to monitor how Uganda utilises Shs3.5 trillion loan

The International Monetary Fund (IMF) has revealed that it will on a quarterly basis monitor how Uganda will spend the $1 billion (Shs3.5 trillion) loan extended to the country.

The loan approved last Monday will be disbursed in three financial years, starting with the 2021/22 financial year which kicked off on July 1. The IMF board approval cleared the way for “immediate disbursement of about USD 258 million, usable for budget support.”

Amine Mati, a Division Chief in the Africa Department at IMF who led the organization team during negotiation with Uganda government officials, revealed in an interview that mechanisms have been put in place to ensure that expense of COVID-19 money is tracked.

“We are having plans, safeguards in place to ensure that funds released are used for intended purposes,” he said last Thursday. Mati revealed the government has started publishing and will continue to publish procurement contracts with names of the company as well as owners of those companies.