This archive report was first published on 1 December 2019.
Kenya's quest for economic growth and development is intricately linked to access to electricity. Studies by reputable institutions have consistently shown that electricity is a key driver of human development. In 2017, Philip J. Lloyd of Cape Peninsula University of Technology, South Africa, noted that 'the use of energy is strongly related to almost every conceivable aspect of development.'
With this in mind, it is imperative that Kenya prioritizes affordable electricity access. The government's 'Last Mile Connectivity Project' aimed to achieve over 70% connectivity by 2017 and universal access by 2020. However, Kenya Power's recent proposal to increase energy tariffs has sparked concerns about the project's viability.
As the sole distributor of electricity in the country, Kenya Power's primary obligation should be to Kenyan citizens. The government should take a bold move to ensure cheap power is available by rejecting any tariff rise proposals. By doing so, Kenya can redefine its role and align it with the objective of transforming the country from a net importer to a net exporter of finished goods.
Low electricity tariffs have been used to incentivize foreign direct investments in the manufacturing space in countries like Ethiopia. The private sector in Kenya has also pushed for low energy costs, but with limited success. To achieve low tariffs, the government must plug budgetary wastage points and subsidize power supply to consumers.
According to the World Economic Forum's 2018 report, Kenya scored 3.3 in government spending efficiency, ranking 70th globally. Rwanda, on the other hand, scored 5.6, ranking fifth. The wastage comes in the form of bloated project costs, contract penalties, and corruption. By addressing these issues, Kenya can efficiently use government funds and potentially fund the entire annual revenue collection by KPLC.
