The Kenya government, last week, surprised many when it took a populist decision to set two prices of the same quantity of maize flour to cater for two extremes of people within the economy.
The high prices of maize flour, the chief staple food, had recently turned the government of the people into an unpopular regime with Prime Minister Raila Odinga receiving constant boos while on state functions.
The government finally responded by setting two price caps, Kshs72 for the urban and Kshs52 for the rural, for a-2-kgs pack of maize flour. To illustrate its level commitment, the government announced plans to set up its own grain-milling plants to control maize flour prices in the market and abolished services of many middlemen whom it perceived as responsible for price escalation. Actions of our eastern neighbours are not any different from those Rwanda and Tanzania.
The governments of Tanzania and Rwanda have recently been singing the same chorus on the need for equitable fuel prices in a market controlled by greedy barons seeking to exploit every opportunity to increase market prices. Such actions bring back the memories of the early 1990s when the government was still a central player in price controls. Everybody would gather by the radio receiver to listen to the minister of finance as he read out price caps for various basic commodities.
Although actions of the Kenyan government are not anywhere near the price controls of the early 1990s whose net effect was price distortion and emergence of a lucrative black market, its actions show the need for minimum government intervention to prevent commodity prices from running amuck. It shows that minimal price interventions are needed to protect citizens against vagaries of free market economy.
While in theory a free market economy perfectly operates where the forces of demand and supply determine the market price of a given product, the practice often turns out different. The fuel market for instance is controlled by a few large companies with a behemoth market share that gives them the ability to fix market prices in total breach of market fundamentals such as cost of production.
That is why the government does not need to abdicate is role as the market regulator. The Kenyan government has in the past used the National Oil to keep fuel prices from running amuck but its presence is so limited that it can scarcely take on industry giants. Now it has resorted to exerting pressure on fuel companies when it feels the market price is not reflective of the costs involved.
Shell Kenya, last week, finally succumbed when it announced that it had reduced the price for a litre of petrol by Kshs15 (Shs375). In times of scarcity, Rwanda uses fuel quotas to prevent prices from rising beyond the reach of average Rwandan. However, the Uganda government often folds its hands as Ugandans continue to get a beating from unscrupulous dealers. The government should learn from its neighbours that minimal controls are necessary to prevent prices from escalating beyond reasonable levels. Our neighbours seem to have set a precedent that is likely to sweep a cross Africa
Thursday, December 18, 2008
Friday, September 12, 2008
US nationalisation of mortgage firms defeats absolute capitalism
The United States government’s decision to takeover Freddie Mac and Fannie Mae, the country’s two largest mortgage firms, may have surprised financial experts but it demonstrates that capitalism in its entirety may not absolutely hold.
The takeover brings to life the decades-old argument on whether the government should intervene in private business in a free-market economy. While free-market economists argue that economies can flourish on the law of supply and demand, mixed-market economists believe that the government can intervene in the market when necessary.
The decision by the Bush administration last week to take over the two mortgage firms further strengthens the latter argument. It demonstrates the need for government intervention in the face of a looming calamity even if such a decision is against the central tenets of capitalism.
Years ago, few people would have rightfully predicted a government takeover in the world’s model of capitalism but the decision clearly demonstrates that even hardcore capitalists are ready to bend the rules if need be.
While such government takeovers are always unpopular with shareholders and company proprietors, it saves the country’s face in face in a looming economic catastrophe. Following the announcement that the federal government would receive purchase rights for up to 80 per cent of the companies’ shares at less than $1 a share, the two stocks fell by an average of 22 per cent to just above $1.
The New York Times quoted Henry M. Paulson Jr, the US Treasury secretary, saying the bail out was a rescue plan to prevent further turmoil in the financial markets. “This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement,” he said.
However, the Ugandan government is often times reluctant to intervene in the private sector arguing the economy is liberalised and that such a move defeats the central tenets of free-market economy.
The government for instance folded its arms and watched the country’s most-promising financial institutions collapse. Bank of Uganda, the regulator of the financial sector, in 1999 closed Cooperative Bank and Greenland Bank, some of the budding indigenous banks at that time, for insolvency and bankruptcy.
However, the Freddie Mac and Fannie Mae takeover shows that all is not lost even when the company is in red.
Unfortunately it was not the case for Ugandans. The banks’ problems came at a time when the government was aggressively divesting its interests in state corporations and was reluctant to takeover a private companies but was more inclined to the donor-friendly route – to close the banks. The country’s financial sector consequently sunk into deep doldrums from which we are beginning to recover.
The government could for instance have reversed the destiny of the financial market with a sound turnaround strategy of Greenland and Cooperative Bank and later sold the banks after they turned profitable. The government in return could have reaped benefits after selling the institutions to a strategic investor or through listing on the stock exchange, giving back to citizens what it had taken as seen in the success story of Stanbic Bank.
Such government interventionist measures can further be extended to protect consumers in times of scarcity when traders resort to arbitrary price increments. The Competitions Bill currently gathering dust in the pigeon hole of the Minister of Trade is precisely what the country needs to address the gaps. In the U.S., the anti-competitions serves the same purpose.
While free-market economists argue should stay out of business of the private sector, the U.S. government takeover of Freddie Mac and Fannie Mae show that in under special circumstances government intervention is necessary. It is template from which we can draw lessons.
The takeover brings to life the decades-old argument on whether the government should intervene in private business in a free-market economy. While free-market economists argue that economies can flourish on the law of supply and demand, mixed-market economists believe that the government can intervene in the market when necessary.
The decision by the Bush administration last week to take over the two mortgage firms further strengthens the latter argument. It demonstrates the need for government intervention in the face of a looming calamity even if such a decision is against the central tenets of capitalism.
Years ago, few people would have rightfully predicted a government takeover in the world’s model of capitalism but the decision clearly demonstrates that even hardcore capitalists are ready to bend the rules if need be.
While such government takeovers are always unpopular with shareholders and company proprietors, it saves the country’s face in face in a looming economic catastrophe. Following the announcement that the federal government would receive purchase rights for up to 80 per cent of the companies’ shares at less than $1 a share, the two stocks fell by an average of 22 per cent to just above $1.
The New York Times quoted Henry M. Paulson Jr, the US Treasury secretary, saying the bail out was a rescue plan to prevent further turmoil in the financial markets. “This turmoil would directly and negatively impact household wealth: from family budgets, to home values, to savings for college and retirement,” he said.
However, the Ugandan government is often times reluctant to intervene in the private sector arguing the economy is liberalised and that such a move defeats the central tenets of free-market economy.
The government for instance folded its arms and watched the country’s most-promising financial institutions collapse. Bank of Uganda, the regulator of the financial sector, in 1999 closed Cooperative Bank and Greenland Bank, some of the budding indigenous banks at that time, for insolvency and bankruptcy.
However, the Freddie Mac and Fannie Mae takeover shows that all is not lost even when the company is in red.
Unfortunately it was not the case for Ugandans. The banks’ problems came at a time when the government was aggressively divesting its interests in state corporations and was reluctant to takeover a private companies but was more inclined to the donor-friendly route – to close the banks. The country’s financial sector consequently sunk into deep doldrums from which we are beginning to recover.
The government could for instance have reversed the destiny of the financial market with a sound turnaround strategy of Greenland and Cooperative Bank and later sold the banks after they turned profitable. The government in return could have reaped benefits after selling the institutions to a strategic investor or through listing on the stock exchange, giving back to citizens what it had taken as seen in the success story of Stanbic Bank.
Such government interventionist measures can further be extended to protect consumers in times of scarcity when traders resort to arbitrary price increments. The Competitions Bill currently gathering dust in the pigeon hole of the Minister of Trade is precisely what the country needs to address the gaps. In the U.S., the anti-competitions serves the same purpose.
While free-market economists argue should stay out of business of the private sector, the U.S. government takeover of Freddie Mac and Fannie Mae show that in under special circumstances government intervention is necessary. It is template from which we can draw lessons.
Saturday, May 10, 2008
Uganda in need of venture capitalists
Barclays Bank’s aggressive loan recovery has once again swallowed one of the country’s most promising start-ups –Bee Natural Products. The company considered the most promising in amateurish honey-processing industry, is under receivership for failure to re-pay loan of about Shs4 billion.
Its imminent demise completes a life-cycle characteristic of Uganda Small and Medium scale enterprises (SMEs). Ms Maria Odido, the managing of Bee Natural Products was last year voted the most promising woman entrepreneur by the Uganda Investment Authority.
And the company has featured on new agencies as Uganda’s success story in the burgeoning honey industry. Such was the company’s promise that news that it had been placed under receivership surprised most in the b usiness circles. But it should not surprise someone who has closely followed Uganda’s SMEs.
The lifecycle for most SMEs takes a characteristic shape of a great business idea, then a bank loan followed by a period of much promise winning awards and sumptuous supply contracts, then the much-dreaded receivership when the financers of the great idea come knocking. So what happens? SME experts will often place blame on business owners for wrong business ethic. But, I believe, the present credit environment has done little to support growth of the private sector.
Honey Bee Products is the fifth company under receivership for failure to pay noticeably Barclays Bank loans in a space of six months. This not to say other financial institutions have not been involved in other receiverships but it serves show how businesses are struggling to service loans from financial institutions.
The annual interest rates of between 18 and 25 per cent, lend little credence to promoting growth of many start-ups already struggling with high operational cots. That is why Uganda desperately needs venture capitalists, investors who buy equity (shares) into start-ups as means of financing with an eye on long term prospects of the company.
East African Development Bank Director General Godffrey Tumusiime, in an effort to diversify the bank’s product portfolio at the same time performing the noble duty of developing enterprises in the region, touted to his board the idea of setting up a venture capital fund to finance start-ups.
Although the idea received little support from the bank’s board of directors, it is no doubt that the region and Uganda in particular is in dire need of venture capitalists.
In countries such as the United States, venture capitalists are often on the look out for great business ideas that need funding. Entrepreneurs pitch their business ideas to a team of financiers who later on buy equity into such businesses placing the knowledge- entrepreneurs at the helm of the new company’s operations.
By so doing, they give start-ups the much needed boost lessening the burden of borrowing from financial institutions. Because of this, multi-national corporations such as google, facebook, myspace have sprung from university dormitories to become mutlti-national corporations. That is why venture capital in necessary for Uganda’s ailing SME sector.
Its imminent demise completes a life-cycle characteristic of Uganda Small and Medium scale enterprises (SMEs). Ms Maria Odido, the managing of Bee Natural Products was last year voted the most promising woman entrepreneur by the Uganda Investment Authority.
And the company has featured on new agencies as Uganda’s success story in the burgeoning honey industry. Such was the company’s promise that news that it had been placed under receivership surprised most in the b usiness circles. But it should not surprise someone who has closely followed Uganda’s SMEs.
The lifecycle for most SMEs takes a characteristic shape of a great business idea, then a bank loan followed by a period of much promise winning awards and sumptuous supply contracts, then the much-dreaded receivership when the financers of the great idea come knocking. So what happens? SME experts will often place blame on business owners for wrong business ethic. But, I believe, the present credit environment has done little to support growth of the private sector.
Honey Bee Products is the fifth company under receivership for failure to pay noticeably Barclays Bank loans in a space of six months. This not to say other financial institutions have not been involved in other receiverships but it serves show how businesses are struggling to service loans from financial institutions.
The annual interest rates of between 18 and 25 per cent, lend little credence to promoting growth of many start-ups already struggling with high operational cots. That is why Uganda desperately needs venture capitalists, investors who buy equity (shares) into start-ups as means of financing with an eye on long term prospects of the company.
East African Development Bank Director General Godffrey Tumusiime, in an effort to diversify the bank’s product portfolio at the same time performing the noble duty of developing enterprises in the region, touted to his board the idea of setting up a venture capital fund to finance start-ups.
Although the idea received little support from the bank’s board of directors, it is no doubt that the region and Uganda in particular is in dire need of venture capitalists.
In countries such as the United States, venture capitalists are often on the look out for great business ideas that need funding. Entrepreneurs pitch their business ideas to a team of financiers who later on buy equity into such businesses placing the knowledge- entrepreneurs at the helm of the new company’s operations.
By so doing, they give start-ups the much needed boost lessening the burden of borrowing from financial institutions. Because of this, multi-national corporations such as google, facebook, myspace have sprung from university dormitories to become mutlti-national corporations. That is why venture capital in necessary for Uganda’s ailing SME sector.
Thursday, March 13, 2008
Uganda needs policy to deal with e-waste
While researching on the likely influx of electronic waste (e-waste) after government announced plans to set up a computer refurbishment plant, I talked to the minister of Information and Communication Technology, Dr Ham Mulira, who dismissed the threat as “baseless and short-sighted”.
Three months later, at the opening of the e-government forum in Kampala, the minister owned up to his flawed opinion when he announced that the government plans to enact policy on e-waste.
Although the minister was non committal as to when the policy the policy will be drafted, his statement serves to remind us of the growing threat of e-waste in a country that is already grappling with disposal of municipal waste.
E-waste has recently become a cause for concern among developed and developing nations that have registered unprecedented growth in information and communication technologies.
While developed nations have laws that govern management of e-waste, developing countries lack the necessary laws. Thus, such countries as Uganda continue to register influx of second-hand electronics disposed of by developed nations. Anti e-waste laws compel leading electronic manufacturers to dispose of electronic waste in environmentally friendly manner.
Although Uganda does not generate such large quantities of e-waste as Nigeria and India, there are signs that e-waste could easily become a problem in the near future.
This likelihood is further compounded by the fact that the market for second electronics, whose technology is way past its sell by date, is flourishing. Many Ugandans have turned to second-hand electronics to circumvent the high prices of brand new items. Actually, the large part of business at Kisekka market is built on such trade. Such electronics as TV sets, computers, mobile phones, and fridges among others have become the biggest contributors of electronic waste.
Although the government has taken some commendable steps toward reducing the influx of second hand items by introducing tax on such imports, there are still gaps that need to be plugged. For instance such tax does not apply to second hand computers or mobile phones, opening a new frontier for the influx of yet another type of e-waste.
That is why the minister’s comments provide hope to Ugandans that the government has already noticed the looming problem and is taking necessary steps to correct it. But given the way the government conducts its business, it would not be surprising if it takes five years before such policy comes into effect. And judging from the minister’s tone, the policy is yet to be drafted. It is therefore important that the concerned ministry moves fast to draft and enact the policy expected to restore sanity into the growing spate of e-watse.
Three months later, at the opening of the e-government forum in Kampala, the minister owned up to his flawed opinion when he announced that the government plans to enact policy on e-waste.
Although the minister was non committal as to when the policy the policy will be drafted, his statement serves to remind us of the growing threat of e-waste in a country that is already grappling with disposal of municipal waste.
E-waste has recently become a cause for concern among developed and developing nations that have registered unprecedented growth in information and communication technologies.
While developed nations have laws that govern management of e-waste, developing countries lack the necessary laws. Thus, such countries as Uganda continue to register influx of second-hand electronics disposed of by developed nations. Anti e-waste laws compel leading electronic manufacturers to dispose of electronic waste in environmentally friendly manner.
Although Uganda does not generate such large quantities of e-waste as Nigeria and India, there are signs that e-waste could easily become a problem in the near future.
This likelihood is further compounded by the fact that the market for second electronics, whose technology is way past its sell by date, is flourishing. Many Ugandans have turned to second-hand electronics to circumvent the high prices of brand new items. Actually, the large part of business at Kisekka market is built on such trade. Such electronics as TV sets, computers, mobile phones, and fridges among others have become the biggest contributors of electronic waste.
Although the government has taken some commendable steps toward reducing the influx of second hand items by introducing tax on such imports, there are still gaps that need to be plugged. For instance such tax does not apply to second hand computers or mobile phones, opening a new frontier for the influx of yet another type of e-waste.
That is why the minister’s comments provide hope to Ugandans that the government has already noticed the looming problem and is taking necessary steps to correct it. But given the way the government conducts its business, it would not be surprising if it takes five years before such policy comes into effect. And judging from the minister’s tone, the policy is yet to be drafted. It is therefore important that the concerned ministry moves fast to draft and enact the policy expected to restore sanity into the growing spate of e-watse.
Wednesday, January 30, 2008
Tanzania’s new scheme provides blue-print for citizen empowerment
Tanzania’s new scheme provides blue-print for citizen empowerment
Recent remarks by President Yoweri Museveni during celebrations to mark 22 years of National Resistance Movement in power, that the prosperity for all programme commonly known as bonna baggawale had met “tough challenges” once again exposed the government’s archetypal ineptness in planning for its citizens.
The bonna baaggawale programme, which was launched in July 2007 with the hope of providing peasants with the often elusive microfinance for rural enterprise development, has since stalled after it met procedural hi-cups as a result of government ill preparations.
Now that President Museveni has admitted that the government did not do enough homework and therefore time to get back to the drawing board, it is imperative that government draws lessons from Tanzania where an almost similar scheme that provides hope to budding Tanzania entrepreneurs is taking shape.
The Tanzania government recently launched a scheme that will create new enterprises, strengthen existing ones, start companies, and establish mutual funds to uplift the living standards of Tanzanians, according to the East African.
Unlike Uganda, Tanzania has instituted the necessary policy guidelines and regulations to ensure that the scheme does not suffer a still-birth.
The Tanzania scheme for instance takes a more comprehensive approach that will provide loans for would-be entrepreneurs in total contrast of the Ugandans scheme that focuses on peasants.
Besides, the fund will also act as a guarantor for entrepreneurs wishing to access financing from banks. Unlike the undefined ministry of microfinance that was hurriedly set to spearhead the Bonna baggawale programme, the National Economic Empowerment Council, which will administer the fund in Tanzania, has been operating since 2005 laying ground work for the scheme.
The council will make use of the research institutions to implement research findings for the benefit of the people. Also, the scheme takes note that would-be entrepreneurs need skills to clearly execute some of their business plans.
And as a result, this will save the fund of unnecessary money losses it would have incurred through failed businesses and equipped recipients. As the Uganda technocrats get back to the drawing board following president Museveni’s remarks, it is important to consult the Tanzanians on how go about it to avoid making more mistakes.
Recent remarks by President Yoweri Museveni during celebrations to mark 22 years of National Resistance Movement in power, that the prosperity for all programme commonly known as bonna baggawale had met “tough challenges” once again exposed the government’s archetypal ineptness in planning for its citizens.
The bonna baaggawale programme, which was launched in July 2007 with the hope of providing peasants with the often elusive microfinance for rural enterprise development, has since stalled after it met procedural hi-cups as a result of government ill preparations.
Now that President Museveni has admitted that the government did not do enough homework and therefore time to get back to the drawing board, it is imperative that government draws lessons from Tanzania where an almost similar scheme that provides hope to budding Tanzania entrepreneurs is taking shape.
The Tanzania government recently launched a scheme that will create new enterprises, strengthen existing ones, start companies, and establish mutual funds to uplift the living standards of Tanzanians, according to the East African.
Unlike Uganda, Tanzania has instituted the necessary policy guidelines and regulations to ensure that the scheme does not suffer a still-birth.
The Tanzania scheme for instance takes a more comprehensive approach that will provide loans for would-be entrepreneurs in total contrast of the Ugandans scheme that focuses on peasants.
Besides, the fund will also act as a guarantor for entrepreneurs wishing to access financing from banks. Unlike the undefined ministry of microfinance that was hurriedly set to spearhead the Bonna baggawale programme, the National Economic Empowerment Council, which will administer the fund in Tanzania, has been operating since 2005 laying ground work for the scheme.
The council will make use of the research institutions to implement research findings for the benefit of the people. Also, the scheme takes note that would-be entrepreneurs need skills to clearly execute some of their business plans.
And as a result, this will save the fund of unnecessary money losses it would have incurred through failed businesses and equipped recipients. As the Uganda technocrats get back to the drawing board following president Museveni’s remarks, it is important to consult the Tanzanians on how go about it to avoid making more mistakes.
Govt should take a closer look on SACCOs
Govt should take a closer look on SACCOs
A great deal of optimism surrounds the impending disbursement of "prosperity for all" (Bonna Bagaggawale) funds, but a closer shows that some important issues may have been ignored.
According to the government master plan for the programme, the funds will be distributed by Post Bank through Savings and Credit Cooperatives (SACCOs). So many SACCOs, as a result, have sprung up with the aim of taping into the government coffers.
Although distributing funds through SACCOs is a good idea considering risks associated with funding individuals, lack of a well laid-out regulatory framework to control activities of SACCOs is rather worrisome.
There is no clear policy on what entails the formation of SACCOs as long there is a group of willing individuals ready to come together to form a cooperative organisation.
Issues of regulation and control are paramount for the performance of any industry. However, the manner in which SACCOs operate if not well monitored can be a recipe for disaster.
In July 2006, hundreds of people lost their savings after Caring for Orphans Widows and Elderly (COWE), an obscure NGO operating in Kabale, closed shop nine months after it had commenced operations.
Although registered as an NGO, COWE operated more or less like SACCOs for it encouraged its members to save with the organisation, there after access loans and share profits accumulated thereafter.
The organisation whose membership was close to 1, 700 did not work as promised. One morning of July 2006, members of the organisation woke up to an empty office after the organisations directors closed and disappeared with millions of shillings in member savings. Police is still hunting.
The demise that befell members of COWE has since remained a black spot in the minds of Kabale residents regarding operation of SACCOs. And it is such kind of apprehension that greets government’s bonna bagaggawale (prosperity for all) programme as it rolls in areas that once had no access to credit financing.
Experiences in Kenya also show that unregulated SACCOs can easily engage in dubious deals. Some organisations register as SACCOs and later engage in illegal pyramid schemes where individuals are enticed to contribute money with the hope of multiplying their portfolios after more members join.
However the end result of such schemes is the loss of millions of shillings by the unsuspecting public. Government may need to draw some lessons from such experiences to ensure that the past mistakes are not repeated.
It is therefore imperative that government sets up a clear regulatory environment to control the activities of the ever-increasing SACCOs and provide the much-needed security to savings of the rural folks.
A great deal of optimism surrounds the impending disbursement of "prosperity for all" (Bonna Bagaggawale) funds, but a closer shows that some important issues may have been ignored.
According to the government master plan for the programme, the funds will be distributed by Post Bank through Savings and Credit Cooperatives (SACCOs). So many SACCOs, as a result, have sprung up with the aim of taping into the government coffers.
Although distributing funds through SACCOs is a good idea considering risks associated with funding individuals, lack of a well laid-out regulatory framework to control activities of SACCOs is rather worrisome.
There is no clear policy on what entails the formation of SACCOs as long there is a group of willing individuals ready to come together to form a cooperative organisation.
Issues of regulation and control are paramount for the performance of any industry. However, the manner in which SACCOs operate if not well monitored can be a recipe for disaster.
In July 2006, hundreds of people lost their savings after Caring for Orphans Widows and Elderly (COWE), an obscure NGO operating in Kabale, closed shop nine months after it had commenced operations.
Although registered as an NGO, COWE operated more or less like SACCOs for it encouraged its members to save with the organisation, there after access loans and share profits accumulated thereafter.
The organisation whose membership was close to 1, 700 did not work as promised. One morning of July 2006, members of the organisation woke up to an empty office after the organisations directors closed and disappeared with millions of shillings in member savings. Police is still hunting.
The demise that befell members of COWE has since remained a black spot in the minds of Kabale residents regarding operation of SACCOs. And it is such kind of apprehension that greets government’s bonna bagaggawale (prosperity for all) programme as it rolls in areas that once had no access to credit financing.
Experiences in Kenya also show that unregulated SACCOs can easily engage in dubious deals. Some organisations register as SACCOs and later engage in illegal pyramid schemes where individuals are enticed to contribute money with the hope of multiplying their portfolios after more members join.
However the end result of such schemes is the loss of millions of shillings by the unsuspecting public. Government may need to draw some lessons from such experiences to ensure that the past mistakes are not repeated.
It is therefore imperative that government sets up a clear regulatory environment to control the activities of the ever-increasing SACCOs and provide the much-needed security to savings of the rural folks.
Sunday, April 02, 2006
Viable option to power cuts
Researchers at Makerere University Centre for Research in Energy and Energy Conservation (CEEC) have proposed a project, which when funded, will utilise agricultural waste for electricity production. Rural areas with plentiful agricultural produce but with no access to the national grid are most likely to benefit from the initiative. Properly treated, agricultural by-products (biomass) such as maize cobs, baggasse (fibrous residue remaining after the extraction of juice from the crushed stalks of sugar cane), coffee and rice husks, and sawdust can be a practical and environmentally friendly source of energy. Noble as it seems the project has attracted little interest from government technocrats. However, such countries as Bangladesh, China, and India have shown that with necessary support, generating electricity from agricultural waste is a viable option to power outages. The countries mainly use rice husks as the major raw material. Dr. Izael Pereira Da Silva, an energy expert at CEEC, Makerere University and lead researcher for the pilot project says biomass is a cheap way to produce electricity. According to Da Silva, the pilot project will generate 90MW (50 percent of the current national power production) for districts of Moyo and Adjumani. But for un known reasons, the government has remained reluctant. More than 85 percent of Ugandans live in rural areas with no access to electricity. Uganda is predominantly an agricultural country that produces large amounts of residues from agricultural and forestry sectors. According to a National Biomass study carried out recently, every hectare of maize cultivated produces an average of 3.7 tonnes of agricultural produce per annum. According to the 2002 census, approximately 138,750 tonnes of agricultural residue are produced annually from 7,500 hectares, of which 50 percent can be utilised for electricity production.
Kakira sugar works, Sugar corporation of Uganda Limited (SCOUL), and Kinyara Sugar Works utilise baggasse to meet their internal energy requirements. On average, 3.35 tonnes of baggasse are produced per tonne of sugarcane. Kakira, which is the largest, produces 750 tonnes of baggasse per day, producing 3MW of heat and power. Hima Cement factory uses 24 tonnes of coffee husks per day. 280,000 tonnes of coffee are produced annually, ensuring plentiful supply of coffee husks as a bio residue. Considering that Uganda is already reaping benefits of electricity from agricultural produce, it is important that the government seriously considers the proposal CEEC has put on table. |
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