Does public investment matter for energy supply? evidence from Uganda

Abstract

This study examines the effect of public investment in energy supply in Uganda, using quarterly time series data spanning 2009Q1 to 2021Q2. The study findings identify a positive and significant relationship between public investment and energy supply, revealing that a 1% increase in public investment leads to a 0.191% increase in energy supply. Furthermore, inflation exhibited a negative impact on the energy supply, with a 1% increase in inflation correlating to a 4.6% reduction in the energy supply. In addition, the implementation of monetary policy and the Public Investment Management System (PIMS) reforms were found to significantly increase energy supply, contributing to an 18.6% increase and a 15.0% increase for every 1% increase in its utilization, respectively. In addition, the urban population growth rate positively influenced the energy supply, with a 1% increase corresponding to a 0.429 % increase in energy supply. The study recommends that policymakers enhance transparency and efficiency in budget allocations in the energy sector, develop inflation management strategies to stabilize the energy sector and prioritize the continued adoption and integration of PIMS for improved governance and sustainable energy supply.