Kenya's industrial electricity tariffs are the highest among key African economies, according to a new industry report, a situation the private sector warns is rendering the country's manufacturing sector uncompetitive against both regional exporters and incoming cheap goods.
The Regulatory Audit Report by the Kenya Association of Manufacturers (KAM), supported by Trademark Africa and funded by the Foreign, Commonwealth and Development Office (FCDO), reveals that Kenya's average industrial power tariff ranges between $0.18 (Sh23.26) and $0.23 (Sh29.73) per kilowatt hour depending on the tariff category, with small and medium enterprises facing even steeper costs.
The findings indicate that Kenyan manufacturers are being squeezed from both sides: struggling to compete in export markets while simultaneously losing ground to cheaper imported products from China and other African nations that benefit from more favourable energy pricing.
"Some of the African countries that would be competing with Kenyan manufacturers offer better and more favourable electricity tariffs than Kenya," the report notes.
Regional comparison data underscores the disparity. South Africa and Egypt both maintain average tariffs of just $0.03 (Sh3.88) per kWh—roughly one-sixth of Kenya's lower industrial rate. Morocco and Ethiopia average $0.05 (Sh6.46) per kWh, while Tanzania offers $0.08 (Sh10.34) per kWh to its manufacturers. Uganda's average of $0.18 (Sh23.26) per kWh matches Kenya's lower industrial bracket, but remains significantly cheaper for the majority of tariff categories.
Beyond electricity costs, the report highlights how overlapping taxes, fees imposed by national and county governments, and broader production costs compound Kenya's competitiveness deficit. Countries with more supportive industrial policies and lower operational overheads are consistently outpacing Kenyan producers on price.
The consequence, according to the report, is that Kenyan-made products arrive at higher price points on both domestic store shelves and regional export markets. This pricing disadvantage not only erodes the ability of local manufacturers to access other African markets under frameworks like the African Continental Free Trade Area but also makes Kenya a less attractive destination for new major industrial investments.