This archive report was first published on 15 July 2019.
Kenya's government is considering a proposal to introduce a special lower electricity rate for manufacturers, which could reduce the cost of electricity by 30% and attract more investors to the manufacturing sector.
Industry and Trade Cabinet Secretary Peter Munya announced the plan during a tour of Elite Dairies in Ruiru, Kiambu county, on an unspecified date in 2018. The new policy aims to promote intra-regional trade and agricultural production by zero-rating tax on farm inputs sourced from the East African region.
According to Munya, the government will also zero-rate tax on farm inputs from within the East Africa region to promote east Africa intra-trade and agricultural production. This move is part of the government's efforts to promote value addition and manufacturing, one of the country's big four agendas.
Despite the government injecting an additional 900 mega watts to the national grid in the last 5 years, the cost of power in the country has remained high, with many manufacturers paying 21 shillings per kilowatt of power. This has forced some companies to relocate to other countries with cheaper power costs or close shop altogether.
Elite Dairies founder George Ngugi emphasized the need for more government incentives to lower the cost of food production in the country.
