Uganda cut power prices by the most in two decades, helped in part by an appreciating currency that lowered the cost of imported fuel and components.
The East African nation reduced power prices by an average 14% for the quarter ending June 30, the Kampala-based Electricity Regulatory Authority said in a statement on Tuesday.
The shilling has risen 6.1% in the past year making it Africa’s best performing among 23 currencies on the continent tracked by Bloomberg. Uganda spent $2.4-billion in the 12 months to June buying oil products. A stronger currency also reduces the cost of imported components for power plants, according to Julius Wandera, the spokesperson at the power regulator.
Power prices were also cut because the government didn’t have to account for Umeme’s fees after the private distributor’s concession ended this week, said Wandera, adding that the reduction in prices was the biggest since Umeme took over distribution.
The nation’s currency has risen as commodity exports including coffee jumped. That’s helped slow inflation and prompted the central bank to keep rates unchanged.
Still, US President Donald Trump’s plan to levy reciprocal tariffs may reverse inflation gains in nations including Uganda.
While hydro power helps generate most of Uganda’s electricity, the nation does use fossil fuels to produce energy.
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