Energy Reliability is not Negotiable for Growth

Perhaps it is time that we have a frank conversation as a country about the economic factors that slow us down and will keep us at 5.6 growth for years to come.

This past weekend, we witnessed a five-hour blackout that affected the whole country and consequently resulted in huge losses for local businesses. This comes at a time when some of our notable trading partners are unveiling cutting edge inventions designed to cater to the challenges that hamper trade and economic growth.

For example, China’s new elevated bus that straddles traffic—roughly 72 feet long, 25 feet wide and 16 feet tall—powered by electricity. For many countries in the world, electricity is a fundamental component of all development plans and they go to great lengths to ensure it is available and constant.

It would appear that as much as we have the right idea on how to develop our infrastructure, some necessities have fallen through the cracks. For a long time, local manufacturers have continued to bear the brunt of frequent power interruptions due to unreliable supply. These interruptions range from outages, over-voltage, under voltage and surges which lead to immense losses in production time, throughput, operation cost of generators and equipment.

Read: Resolve Land Acquisition to Spur Renewable Energy Growth in Kenya

There has been some marginal improvement by Kenya Power in certain aspects such as provision of alternative feeder lines to consumers to increase redundancy on supply lines, initiation of active WhatsApp groups in different regions, upgrade of substations across the country, frequent forums with stakeholders and assignment of account managers dedicated to consumers for timely intervention. However, this has not solved the problem of power quality and reliability.

Manufacturers have reported that interruptions increased by over 70 per cent in the first quarter of this year compared to the total average of 2015. This is a major pain to industries and we feel that this may not be sustainable in coming days. A survey carried out both last year and this year amongst our members reveals that on average, manufacturers lost an equivalent of five per cent of the monthly electricity bill in certain sectors and as high as 18 per cent in others. Areas hard hit with frequent interruptions include Nairobi, Mombasa, some parts of Western Kenya and the North rift.

And whilst the reliability issue takes longer to be fixed, businesses (who can afford to) have resulted to fuel as an alternative, which is an added cost especially with the introduction of the Road Maintenance Levy. These combined costs will definitely impact on the cost of production and exports.