Cheaper imports from China and other African countries continue to dominate the market Kenya’s electricity most expensive among key African economies – report KENYA has the most expensive power among key African economies and neighbouring countries, an industry report shows.
This, the private sector says, is making the country’s manufacturing sector uncompetitive compared to other exporting markets and unattractive to new major industrial investments. The Regulatory Audit Report by the Kenya Association of Manufacturers, with support from Trademark Africa and funding from the Foreign, Commonwealth and Development Office, indicates the country stands to lose both in the export markets and from cheaper imports.
Kenya’s average industrial power tariff is between $0.18 (Sh23.26) and $0.23 (Sh29.73) per kilowatt hour, dependng on the tariff category, with SMEs having even higher costs. “Some of the African countries that would be competing with Kenyan manufacturers offer better and more favourable electricity tariffs than Kenya,” the report notes.
For instance, South Africa and Egypt have tariffs averaging $0.03 (Sh3.88) per KWh, Morocco and Ethiopia $0.05 (Sh6.46). Tanzania and Uganda have average tariffs of $0.08 (Sh10.34) and $0.18 (Sh23.26) per KWh, respectively. “High production costs due to costs associated with high taxes, fees at national and county governments, where other countries have better industrial policy, such as lower production costs, reduce Kenya’s competitiveness,” the report notes.
Kenyan products end up being more expensive on the shelves. It reduces Kenyan manufacturers' capacity to access other African markets due to potentially high product prices resulting from the high cost of doing business in Kenya.