As Uganda Electricity Distribution Company Limited (UEDCL) prepares to take over electricity distribution from Umeme Limited on April 1, 2025, many Umeme officials are set to lose their jobs. The transition, triggered by the government’s decision not to renew Umeme’s 20-year concession, has raised concerns over workforce redundancy, financial constraints, and operational restructuring.
While the government has assured that some Umeme employees will be retained, it has also emphasized the need to eliminate duplication of roles, making job losses inevitable. Several factors, including financial limitations, existing UEDCL staff, and efficiency concerns, explain why many Umeme workers will not be absorbed into the new system.
A key reason many Umeme officials won’t retain their jobs is the overlap in job functions between Umeme and UEDCL. Since UEDCL is already a government-owned entity with an existing workforce, it does not need to re-employ all Umeme staff once it takes over operations.
Minister of Energy and Mineral Development, Ruth Nankabirwa, made it clear that job retention will depend on whether the roles are already filled within UEDCL:
“The workers of Umeme’s applications were rejected. But the objective of restructuring was to make sure that we have savings. On my side, the objective was to remove duplication and enhance efficiency.”
She explained that if a position at Umeme already exists within UEDCL, the person occupying that role will remain, meaning Umeme officials in similar roles will not be rehired:
“If we interview both of them, the Umeme worker and the UEDCL worker, one of them is bound to lose. So this is inevitable.”
This means that many employees who performed similar duties under Umeme will not be retained, as UEDCL aims to streamline its workforce.
The government is facing significant financial pressure in funding the UEDCL takeover, making it difficult to absorb all Umeme employees.
UEDCL requires an initial USD 50 million investment to take over Umeme’s operations, but the Electricity Regulatory Authority (ERA) has raised concerns over delays in securing these funds. ERA CEO Eng. Ziria Tibalwa Waako warned that the government is not financially ready for the takeover:
“On our side, we aren’t even ready with the USD 50 million for UEDCL to start, let alone the concession agreement wouldn’t allow UEDCL to step in.”
Additionally, the government needs to borrow USD 190 million to buy out Umeme’s existing infrastructure, further limiting its ability to absorb additional employees.
By reducing its workforce, UEDCL hopes to cut operational costs and avoid financial strain, ensuring that electricity tariffs remain affordable.
Despite the concession expiring in March 2025, Umeme is still investing in power distribution infrastructure, as it is contractually obligated to do so. This means the government must compensate Umeme for all unrecovered capital investments, further increasing financial pressure.
ERA CEO Eng. Ziria Tibalwa Waako explained the necessity of Umeme’s continued investment:
“Why is Umeme investing at the last minute? That is because they operate a live network. “For example, if today Parliament is off and the transformer is blown, do you wait for April 2025 when UEDCL is here?”
The government has been planning this transition for over three years, and Umeme employees were given prior notice. While some staff members will be integrated into UEDCL, many positions are no longer necessary under the new operational structure.
Minister Nankabirwa explained the government’s rationale:
“Those who have been working with Umeme should not be surprised. The roadmap was shown, and we have done our best to retain as many as possible. “We have recruited 90% of former staff into the new system, but some positions have become redundant due to the need to eliminate duplication.”
According to Minister Nankabirwa, 191 Umeme employees will lose their jobs once UEDCL takes over operations. Speaking at a Parliamentary Committee retreat, she acknowledged that the government cannot absorb all employees without causing inefficiencies:
“Unfortunately, we cannot simply absorb all the staff, especially since UEDCL already has personnel from the successor company. Doing so would result in redundancy in some offices, leaving employees without work while increasing operational costs, which would ultimately impact electricity supply.”
However, she assured that some of these workers would be given priority for re-employment in related roles:
There are 191 of them, and we will retain them as specialists so that when the need arises, we can call on them. We can also recommend them to contractors working within the network to give them priority.”
Some Umeme officials will not retain their jobs after the UEDCL takeover due to workforce duplication, financial constraints, operational restructuring, and government cost-cutting measures. The government’s priority is to streamline electricity distribution while ensuring that UEDCL operates efficiently without unnecessary expenses.
While some Umeme employees will be reabsorbed, others will face unemployment, marking a significant workforce transition in Uganda’s electricity sector. As the April 2025 deadline approaches, the government must balance cost-saving measures with ensuring a smooth and effective takeover, while addressing concerns about job losses in the sector.