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Kenya’s high electricity costs threaten industrial growth and regional competitiveness
Kenya’s push to become a manufacturing hub in Africa is being undermined by high electricity costs, according to a report by the Kenya Association of Manufacturers. Kenya has some of the highest power tariffs on the continent—far above those of competitors like South Africa, Egypt, and Morocco—raising production costs and making local goods less competitive against imports and exports from lower-cost economies.
As a result, the country is experiencing premature deindustrialization, with manufacturing’s share of GDP falling from about 10% (2011–2016) to 7.6% in 2024. Meanwhile, regional competitors with cheaper power and stronger industrial policies are attracting investment, and some manufacturers are relocating outside Kenya.
The report links high electricity prices to heavy taxes and levies, costly generation and transmission, and inefficiencies in energy management. These challenges threaten Kenya’s ability to benefit from opportunities such as the African Continental Free Trade Area (AfCFTA).
Industry leaders are calling for urgent reforms, including lowering power taxes, improving energy efficiency, streamlining regulations, and investing in affordable energy. Without action, Kenya risks losing its industrial base; with reforms, it could revive manufacturing and strengthen its long-term economic competitiveness
For More information:Kenya’s high electricity costs threaten industrial growth and regional competitiveness - Sharp Daily