Daily Monitor reported on Friday, December 5, 2025, that the Prime Minister, Robinah Nabanja, had stopped the minister of energy from firing the top management of Uganda Electricity Distribution Company Limited (UEDCL). This is the government-owned entity that took over the management of the national electricity distribution network from a private company called Umeme beginning April 1, 2025, exactly eight months ago. I predicted at the time of that takeover that UEDCL would soon become a battleground of powerful forces within Uganda’s power structure, who have a vested interest in its highly lucrative procurement deals.
My predictions were during a debate on UBC television where the CEO of UEDCL, Paul Mwesigwa, featured as a panellist. I warned him that he would find himself embroiled in battles beyond his comprehension. These battles could even end him in jail regardless of how honest and/or competently he does his work. I have been on the Ugandan scene long enough to have an idea of how politics works in our country. Indeed, it is the reason that has made me sceptical of state interventions in the economy. Although I am theoretically convinced, based on historic and contemporary evidence, that an activist state is vital for economic transformation, I am acutely aware that the state in Uganda cannot play such a role. Therefore, in our very specific political context, I am a free market fundamentalist.
Even before they took over from Umeme, UEDCL asked for $85m from the ministry of energy and regulator, the Electricity Regulatory Authority (ERA) to invest in the network. UEDCL wanted this $85m to be offset from the government payout to Umeme on her exit. They wrote to the Solicitor General for a legal opinion on this. They argued that Umeme had let the network deteriorate in the last five years of the concession and therefore should be penalised as per the concession agreement. Yet, Umeme had been deliberately blocked by the regulator from investing more in the network. This was aimed at reducing government payout at their exit.
Meanwhile, by December 31st, 2024, UEDCL had cash in hand worth $20m it had earned through the tariff. They asked for permission from ERA to use this money to procure and stock equipment so that by April 1st, when they take over, they have enough materials to fix the network. This was July 2024. ERA said they should put the money in a fixed deposit account. ERA knew the network was deteriorating rapidly because of very limited investment in it by Umeme because it had not been approving the distributor’s investment plans. The stage had been set for blackouts.
Interestingly, in June 2024, while ERA was refusing Umeme to invest in the network, it did a study of UEDCL and came out with 25 issues on why the government should not entrust them with the takeover of the network. This means they have been supervising and regulating a company they had no confidence in. However, this being Uganda, there could have been another motive: someone perhaps wanted to bring their private company to take over from Umeme, therefore the better to mudsling UEDCL.
Be that as it may, UEDCL had revenues of Shs 200 billion, and Umeme, Shs 2.3 trillion. By taking over from Umeme, UEDCL, a state-owned company, had overnight increased her revenues ten times to Shs 2.5 trillion. This would bring huge and lucrative procurement tenders under government control and therefore spark off intense power struggles. Anyone with even basic knowledge of Uganda would have easily predicted this.
Thus, after taking over the network, UEDCL did scoping of the network and specifications for items, auditing of transformers, etc. It took four months (the first 120 days) to critically analyse the behaviour of the network for both the hard and soft parameters. They found many critical equipment failures: 12% of transformers, equivalent to 3,500 of them, needed upgrades. Then 26.7% of low-voltage poles (71,483) and 12.5% (27,138) of medium-voltage poles were due for replacement. Finally, 11 out of their 60 substations were overloaded and needed upgrade.
Any Ugandan reading this article is a victim of constant electricity blackouts in the country. People blame UEDCL. Yet it inherited a bad network that has been allowed to atrophy by the regulator. Why didn’t UEDCL procure equipment early so that immediately after they take over from Umeme, they begin rehabilitation? Uganda’s procurement rules are self-defeating, archaic and arcane. According to the Public Finance Management Act, an accounting officer can only commit a government institution when they have cash. Therefore, UEDCL had to wait until they took over from Umeme in April 2025 to begin procurement of equipment to fix the network.
Once in charge, and after auditing the network, UEDCL set up Shs 300 billion for investment in the network. Procurement is ongoing for 4,100 transformers (Shs 66 billion), 350,000 meters (Shs 70 billion), etc. For the myriad wheeler-dealers that dominate politics in Uganda, this is an opportunity to flex political muscle, get lucrative contracts and sing kumbaya. I am inclined to believe that the fight between the Ministry of Energy and UEDCL is over who controls and therefore awards these tenders.
Our country has a program called ‘Buy Uganda, Build Uganda’. Under PPDA rules, tenders ring-fenced for local companies need participating local firms to have established a factory for ten years. It doesn’t take rocket science to see that middlemen for foreign firms had used the PPDA law to protect their interests. UEDCL went to PPDA and asked for a waiver on this provision of the law to allow local firms without ten years to participate. They used BUBU to buy local transformers and local meters. All the conductors, except for high voltage, were locally procured. This took money from middlemen representing foreign firms who now want the heads of executives at UEDCL.
Earlier this year, the minister of energy, Ruth Nankabirwa, changed the articles of association and memorandum of incorporation of UEDCL to say she can terminate any member of the board or the entire board at any time at her sole discretion. This makes the board subservient to her “discretion”. Why would Nankabirwa assume such powers over the board? Then Daily Monitor claimed the ministry has a private company it is trying to smuggle through the backdoor to take over UEDCL. The ministry denied this. Whatever the truths, the exit of Umeme has opened doors for political buccaneering in Uganda’s previously insulated electricity distribution sector. It also portends worse days to come.
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