ENERGY: High cost of electricity is the single source of worry for foreign and local investors, reflecting the impact of the struggling Kenya Power on the entire economy, according to latest government survey.

The survey also shows it takes too long for investors to get their premises connected to electricity compared to other government services.

“More than 50 per cent of the respondents indicated that the cost of electricity had worsened,” the Foreign Investment 2020 report released by Kenya National Bureau of Statistics  (KNBS) last week shows.

Kenya has the third most expensive domestic electricity prices in in Africa according to the globalpetroleumprices.com

The proportion of respondents who indicated that it takes a long time to get power connection was 36.7 per cent.

Other factors which were surveyed were water, access to business licence, property transfer, ease of business registration, cost of credit and transport infrastructure.

Transport infrastructure was the best and most improved sector improving the ease of doing business.

About 67 per cent of the respondents indicated that there was improvement in Transport and Infrastructure followed by ease of business registration and access to business licence at 46.3 per cent and 42.4 percent, respectively. 

However, 21.8 percent and 21.4 percent of businesses showed that the supply of water and other  utilities, and the cost of credit had worsened.

Further, 36.5 percent and 35.3 percent of the respondents indicated that it takes a long to acquire construction permits and work permits, respectively. 

“In contrast, 38.1 percent and 37.7 per cent of the respondents indicated that it takes a short time to get business licence and register with the tax authority, respectively,” says KNBS.

High inefficiencies

For the rest of the factors, majority of respondents indicated moderate time in acquiring them.

Kenya Power has been struggling with management issues that saw it lose money to corruption and theft.

It has a lot of debt with high inefficiencies caused by 25 percent power losses on the transmission lines.

The company MD Bernad Ngugi recently resigned from the company amidst news of dubious award of tenders at the company.

The company is also shouldering high maintenance costs especially due to rural electrification despite low power consumption in the rural areas. 

The firm also has high bills in terms of standing charges by Independent power producers due to low demand for power. – John Otini