In his inaugural address as the fifth president of Kenya, Dr. William Ruto reiterated his commitment to increase electricity access among Kenyans. He said the previous administration, in which he was principal assistant, had done tremendously well in ensuring that every Kenyan get access to electricity.
While it is true that more Kenyans got access to electricity during the Jubilee administration, statistics indicate that significant number still lack access. Electricity is critical alleviating poverty, overseeing economic growth and improving living standards.
Globally, the percentage of people with access to electricity has been steadily increasing over the last few decades. In 1990, for example, around 71 per cent of the world’s population had access to electricity. By 2016, the figure had increased to 87 per cent. It means 13per cent of the world did not have access to electricity in 2016.
High-income countries – those countries defined by the United Nations as ‘developed’ – are assumed to have an electrification rate of 100 per cent. The increasing global share has primarily been driven by increased access in low and middle-income economies.
In many countries, this trend has been striking: access in India, for example, increased from 43 per cent to almost 85 per cent. Indonesia is close to total electrification (sitting at almost 98 percent) – up from 62 percent in 1990. For countries with strong population growth, such improvements in the share of the population with access is even more impressive.
Whilst the trend is upward for most countries, a number are still severely lagging. At the lowest end of the spectrum, only 8.8 percent of Chad’s population has electricity access. For some countries, significant improvements in access will remain a pressing challenge over the next few decades.
In 2015, the total number of people globally without electricity fell below one billion for the first time in decades; very likely the first time in our history of electricity production. In 1990 more than 1.5 billion didn’t have electricity; by 2015 this had fallen to 952 million. By 2016 it had fallen again to 940 million.
However, there has been tremendous increase in access to electricity over the last few years. For instance, 1.26 billion got access to electricity for the first time in their lives between 2005 to 2016.
Broken down to average daily change this means that on any average day in the last 11 years there were 314,770 people who got access to electricity for the first time in their lives
In sub-Saharan Africa, population growth and high cost of living has led to increase in the total number of people without access to electricity.
In Kenya, 15.93 million people didn’t have access to electricity as of last year. There has been regional shift in electricity access over the past few decades: in 1990, for instance, nearly half (45 per cent) of people in the world without access lived in South Asia. By 2016 the figure had shifted significantly: the largest share now lives in Sub-Saharan Africa – which is now home to nearly two-thirds of the world population without electricity access.
Increase in the global energy prices hassled to increase in the cost of electricity. Electricity tariffs were reviewed in January in an effort to ease the cost of living leading to a 15 per cent reduction by the Jubilee administration.
The government had targeted slashing electricity bills by 33 per cent by the end of December 2021 but dropped the plan and instead chose to reduce the cost in two phases of 15 per cent following contestation from independent power producers (IPPs) who supply electricity to Kenya Power.
The IPPs argued that Kenya has no unilateral right to alter the contracted capacity and payments, saying instead that the State has to protect PPAs with some having up to 20-year protected contracts.
Consequently, the government shelved the second tranche of the electricity cuts after the International Monetary Fund protested, citing a potential collapse of Kenya Power which is currently struggling with cash flow problems.
IMF said the tariff reduction aggravated Kenya Power’s pre-existing liquidity challenges by lowering revenues by an estimated Sh26.3 billion per annum. The multilateral lender has gained influence over Kenyan finance policy since it gave the country Sh270.2 billion ($2.34 billion) in loans in exchange for a reform package that includes eliminating fuel and tax subsidies to improve revenue collection.
Equally, the IMF has introduced a new condition under its 38-month programme requiring the government to scrap the subsidy that has kept petrol prices by October.
Kenya has since April 2021 spent an average of Sh9 billion to subsidise diesel, super petrol and kerosene— costs which rose to an average of Sh12 billion in the last four months alone— highlighting the adverse impact of the intervention on the country’s revenue.
Inflation, a measure of the cost of living, jumped to a 62-month high of 8.5 percent from 8.3 percent the prior month. The shilling is currently at an all-time high of 120.4 against the dollar, raising the cost of imports of a wide variety of goods, including petroleum products, wheat, second-hand clothes, motor vehicles, vegetable oils and industrial machinery.
