Electricity Regulatory Authority (ERA) board chairperson Dr. Sarah Wasagali Kanaabi says the Electricity Supply Industry (ESI) will need to greatly embrace local innovation in order to recover well and stronger from effects of COVID-19 on the electricity subsector.
She says this is the only way to also minimize on the impact of such future disruptions and shocks.
“In a post-Covid world, not only do Local Content Requirements have the potential to embrace the survival and competitiveness of local industries in times of global economic uncertainty, but they could also stimulate the rapid development of locally made technologies, products and enterprenuerial ventures needed to attain the UN SDG number 7 regarding Energy for All” she said.
Dr. Wasagali made the comments as she addressed the Inaugural ESI Local Content Forum 2022 organised by ERA in collaboration with PPDA, UNBS and Uganda Manufacturers Association in Kampala.
Wasagali said that Local Content Requirements could also promote other social benefits such as job creation, development of indegenous technology and infrastructure in addition to redistributing wealth and authority to address concerns of a common man.
COVID-19 IMPACT ON ENERGY SECTOR
The COVID-19 pandemic has had a severe impact on several sectors of the economy following prolonged lockdowns. Many companies and other businesses closed down as a result of the lockdown.
On the manufacturing industry, the closure of factories in China has resulted in supply chain disruptions in Uganda, with delays, raw material shortages, increased costs and reduced orders.
According to Uganda Bureau of Statistics’ Dr. Chris Ndatira Mukiza, the impact of COVID-19 on the construction industry which are mainly private is high and requires a long term recovery period. The reason for this long-term recovery period will be dependent on how quickly other economic activities such as financial intermediation services pick up.
He adds that other sectors like retail, whole sale (non-food items), transport and storage, manufacturing, tourism, hospitality, Arts, SMEs have all severely been hit by COVID-19 and will all require long-term recovery period.
According to finance ministry, there has been a reduction in demand and electricity sales since most businesses closed down and the manufacturing sector cut down on production due to limited market.
As for project implementation, the travel ban according to the ministry badly affected the energy sector as it slowed down their implementation.
The ministry says the lockdown period made it impossible to carry out Factory Acceptance Tests (FATs) on imported key materials such as transformers and conductors that were to be acquired from oversees particularly China, India and Turkey among others.