Kenya cuts electricity tariffs for manufacturers to create jobs

Kenya is cutting night-time electricity tariffs for manufacturers by half to entice investors and boost economic growth and job creation, a top ministry of energy official said on Wednesday.

The East African nation charges firms 15.70 shillings ($0.1522) per kilowatt hour, which is seen as uncompetitive compared with other African nations such as Ethiopia, South Africa and Egypt.

Joseph Njoroge, the principal secretary in charge of electricity at the ministry, said the reduction will apply from 10 pm to 6 am every day to boost usage of electricity when most households and businesses shut down.

“It is about, how do we create jobs for our people? How do we grow as a country? How do we move from an agro-based to an industrial-based country so that we can be able to enhance our GDP,” he told Reuters on the sidelines of an energy conference.

During his inauguration for a second term, President Uhuru Kenyatta said he planned to increase the share of manufacturing to annual economic output to 15 percent from 9 percent.

The government has been trying to boost investments in the sector in recent years with modest success, including the opening of light vehicle assembly plants by Peugeot and Volkswagen.

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Taxes account for about a third of electricity tariffs and Njoroge said they will consider whether some of the charges can be reduced.

Kenya has an installed electricity capacity of 2,336 megawatts (MW) with maximum demand of 1,727 MW, Njoroge said. It has increased the share of the population with access to electricity to 70 percent in the last four years from 30 percent

…Kenya set to build coast-to-centre highway to boost Africa trade

Kenya last week signed a $620 million agreement to build a 530 km (329 mile) highway from its east coast to the centre of the country, part of a campaign to boost its role as a regional trade hub.

A consortium including a unit of South Africa’s Group Five and the Development Bank of Southern Africa with work with the state.

Cabinet Secretary James Macharia said in a statement the road would link Lamu on the coast to Isiolo, north of Nairobi, via Garissa.

The consortium will design, build, finance, maintain, operate and transfer the highway. Work is due to start in mid 2018 and be completed within four years.

Kenya wants to build up a role as a regional trade and transport hub, serving as a link to landlocked countries such as Burundi, Rwanda and Uganda.

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It is seeking more private investment to maintain the pace of spending on highways, railways and other vital assets while reducing its budget deficit.

The Public Private Partnership model has been touted as a promising route to fund new infrastructure across Africa, a continent that struggles with poor transport networks.

“The signing of this agreement shows continued confidence of international investors and its economic stability,” Macharia said.

Macharia said the highway was part of a 2,000 road network linking a planned port in Lamu with the rest of Kenya and neighbouring South Sudan and Ethiopia, of which 505 km is already complete.

He added that the consortium will operate and maintain the road for 25 years after it is opened.

President Uhuru Kenyatta, who was sworn in on Tuesday for a final five-year term, campaigned on what he presented as his record of aggressive economic development drive, citing among other things, new roads.

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