NAIROBI (Reuters) – 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.
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.
($1 = 103.1500 Kenyan shillings)
(Reporting by Duncan Miriri, editing by Louise Heavens)