By Billy Mijungu
Kenya has some of the highest electricity costs in Africa at approximately 0.26 US dollars per kilowatt hour while countries like charge between 0.006 and 0.01 US dollars per kilowatt hour. Yet Kenya is a larger and more diversified economy with deeper financial systems and relative political stability in the African context.
This contrast should trouble us because energy pricing is not a minor policy issue. It is the foundation upon which industrial growth, employment and competitiveness rest.Energy is the bloodstream of an economy. It powers factories, transport systems, technology hubs, farms and homes.
Manufacturers calculate energy as a primary input cost and when it is high they either scale down or relocate to more competitive environments. When energy is affordable industries expand and new ones emerge. For industrialization and electric mobility, electricity costs must fall significantly closer to regional benchmarks.
Lower electricity costs repositions Kenya as a manufacturing hub within Eastern Africa. The country already enjoys strong logistical advantages through its port access, regional connectivity, skilled workforce and developed financial services sector. High cost of production driven largely by energy prices.
Affordable power would unlock agro processing, textile production, steel manufacturing, data centers, electric vehicle assembly and battery technology industries. It would translate into millions of direct and indirect jobs.
The cost of living would also ease. When production costs decline consumer prices follow. Affordable electricity reduces the cost of food processing, water supply, transport services and construction materials. Households would retain more disposable income which in turn stimulates domestic demand and strengthens economic circulation.
Investment in energy infrastructure must remain a central national priority because it affects every sector. A low tax environment combined with affordable electricity and a liberalized energy market would place Kenya firmly on the path to industrial excellence. The energy sector has long been concentrated and heavily state dominated which has contributed to inefficiencies and limited innovation. Expanding competition, encouraging private participation and strengthening transparent regulation can drive efficiency and reduce costs.
For sustainable job creation and long term economic transformation, Kenya can exceed middle income status through deliberate reforms that make energy affordable and accessible. Electricity powers livelihoods, industry and national prosperity.
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