Uganda’s economy is fully liberalized. The economy is predominantly agricultural, with the majority of the population dependent on subsistence farming and light agro-based industries. The country is self-sufficient in food. Coffee,tea, fish and fish products, tobacco, gold , cotton, corn and legumes are the main foreign exchange earners for the country.

It should be recalled that during the 1970s through to the early 1980s, Uganda faced a period of civil and military unrest, resulting in the destruction of the economic and social infrastructure. Since 1986, however, the government introduced and implemented several reform programmes that steadily reversed many past setbacks and aimed the country towards economic prosperity. Between 2006 and 2011, Uganda’s growth in GDP varied between 5.6 % and 7.1 % per annum (UBOS). The country continues to register favourable economic indicators that have in turn resulted in improved standards of living for the Ugandan people.

The energy sector is one of the key sectors in Uganda’s economy. The country has a total energy consumption of approximately 11 million TOE (tonnes of oil equivalent) (2010). This consumption is partially met by a number of energy resources including solar power, biomass and fossil fuels. Biomass is the most important source of energy for 97% of the population, accounting for 90% of the total primary energy consumption, in form of firewood, charcoal or crop residues. Electricity contributes only 1.1% to the national energy balance (121,000 TOE), while oil products (mainly used for vehicles and thermal power plants) account for the remaining 8.9%.

Uganda imports energy to the tune of 1,075,356 TOE and exports up to 6,589 TOE. (Source: Ministry of Energy and Minerals Development, Energy Balance of Uganda 2010). In electrical power generation, hydro power accounts for about 80% of the installed capacity of 845 MW. It should be noted that actual capacity available is less by about 100 MW due to the sinking water level in Lake Victoria. 

Uganda is richly endowed with abundant energy resources which are fairly distributed throughout the country. These include hydro, biomass, solar, geothermal, peat and fossil fuels. The energy resource potential of the country is estimated at 2000 MW of hydro power, 450 MW of geothermal, 460 million tonnes of biomass standing stock with a sustainable annual yield of 50 million tons, an average of 5.1 kWh/m2 per day of solar energy, and about 250 million TOE of peat. In addition, a substantial amount of petroleum and gas deposits have been discovered in the western part of the country. Production and refinery from these deposits are expected to start soon, after finalization of Production Sharing Agreements with multi-national oil companies as well as completion of the relevant legislation. The overall renewable energy power generation potential is estimated to be 5,300 MW. (Source: SE4ALL)