Over 5,000 Ugandans lost jobs in DRE sector as a result of #Covid-19 – report

The “Energy Access Workforce Uganda” report by Power for All, in collaboration with the global campaign to end energy poverty, and Uganda National Renewable Energy and Energy Efficiency Alliance-UNREEEA, has revealed that COVID-19 led to a drastic reduction in the sale of DRE technologies by nearly 20 percent leading to the loss of over 5,000 jobs. 

According to the report, the Pandemic shrunk jobs in Uganda’s Decentralized Renewable Energy sector by 15 percent and the slow growth is expected to persist.

“The Ugandan decentralized renewable energy-DRE sector has seen a 15 percent reduction in its employment workforce in the last two years due to COVID-19 and the measures put in place by the government. Furthermore, unless market conditions improve, employment creation is expected to remain stagnant with no additional jobs until 2025,” the report reads.

The study found out that Uganda’s DRE sector–which includes pico-solar appliances, solar home systems-SHS, and commercial and Industrial-C&I standalone systems–employed close to 30,000 workers in 2021, down from 35,000 in 2019, prior to the COVID-19 pandemic. 

It has also revealed that the economic downturn brought about by the pandemic, coupled with stringent government lockdowns, resulted in a drastic contraction of the SHS market. The sales volume of SHS products declined by 18 percent annually, which directly contributed to a loss in jobs in the DRE sector.

According to the report, the bulk of the jobs in the DRE sector was in the home solar systems sub-sector, accounting for 99 percent of the sector’s employment.  With the other 1 percent going to both the mini-grids and commercial and industrial (C&I) systems.

The country’s economic downturn due to the pandemic and the stringent government lockdowns, led to a drastic reduction in solar home systems (SHS) sales by nearly a fifth, from 400,000 products sold in 2019 to 263,500, in 2021. 

The loss of jobs was not unique to the DRE sector only. According to a survey by the Uganda Bureau of Statistics and the World Bank, Uganda’s employment rates dropped by almost 12 percent towards the end of 2021 compared to the pre-pandemic employment level in 2019.

In addition, the study found the participation of women in the DRE sector in Uganda was low at 28 percent, significantly lower than the country’s overall economy at 49 percent.  On a positive note, the sector is close to achieving pay parity between men and women employed in the sector. 

The report highlights areas of potential intervention to develop the sector, including building the capacity of the DRE workforce. The study identified 12 key areas in which further training is required by Ugandan DRE firms. These include soft skills, such as communication, interpersonal skills, and time management, and hard skills, including installation and commission, marketing, maintenance, and project management. Installation and maintenance skills, necessary to support growth in larger scale mini-grids and C&I, were also highlighted by DRE companies as important focal areas for training. 

Developing Uganda’s DRE sector will require concerted efforts from government agencies and the private sector. It will also need sound policies and adequate regulations to scale up the rollout of micro- and mini-grids. 

Benard Mbaine, the Vice Chairperson of Uganda National Renewable Energy Efficiency Alliance-UNREEEA, noted that DRE has always contributed to achieving Uganda’s targets faster, sustainably, and cost-effectively, therefore, the stagnation of employment in the sector is not good news for the country’s efforts to achieve its development agenda.

“The private sector has been at the forefront of advancing DRE technologies which have contributed up to 38 percent of the current national electricity access rate of 57 percent. Therefore, the government must work closely with the private sector in order to achieve 100 percent electrification by 2040,” says Benard Mbaine.

Mr. Mbaine further noted that Women are the most affected by lack of access to clean energy technologies since they spend most of their time at home and are exposed to indoor pollution from unclean cooking and lighting; therefore, women must be equally involved in DRE discussions and activities if we are to see the change that we want.

The Ugandan DRE sector employed close to 30,000 workers in 2021. Between 2019 and 2021, the sector exhibited a 15percent contraction in the workforce. If the current market situation prevails, employment creation within the Ugandan DRE sector is expected to remain static with no additional job creation in the sector until 2025.

Uganda is largely an informal economy with informal employment accounting for 90 percent of total employment in 2017. The level of informal employment in the Ugandan DRE sector may, in fact, be higher than 20 percent. Under-representation of smaller DRE firms, the source of the majority of informal employment, is likely due to challenges in locating formal addresses and reaching these firms.