Economy

Uhuru orders review of electricity tariffs for SMEs

uk

President Uhuru Kenyatta. FILE PHOTO | NMG

President Uhuru Kenyatta has ordered a reduction on the cost of electricity to small and medium enterprises within one month.

The reduction could come as a big reprieve to the SMEs which currently form part of the 263,116 small commercial registered consumers under the Energy Regulatory Commission (ERC).

Mr Kenyatta made the directive after attending a two-day SMEs forum at the Strathmore Business School.

He said high cost of power has been a major challenge to their efforts of scaling up business.

"I direct the Energy Cabinet Secretary to review electricity tariffs within one month and come up with a sustainable plan to ensure the cost of power to small and medium-sized enterprises is brought down," President Kenyatta said.

The president made the directive when he closed the forum that brought together sector players from across the country.

He added the order is part of several measures that the national government will enforce to support SMEs which employ 75 per cent of the national workforce.

Data by Kenya National Bureau of Statistics shows that there are more than 17 million SMEs registered in Kenya, with 98 per cent of them contributing about 25 per cent of the country’s Gross Domestic Product (GDP).

Most small scale manufacturers have previously complained of the high cost of power saying it led to high prices for their products.

Efforts to reach out to ERC director general Pavel Oimeke for details on how the directive will be effected were unsuccessful as calls went unanswered by the time this story was being published.

The review comes three months after ERC announced a new payment structure with fixed charges to address the fluctuations in power bills that have been a big source of complaint for consumers.

Under the new electricity retail tariffs, ERC capped consumption by small commercial industries at 5,000 kWh per month for which they pay Sh21.95 per unit of power consumed.

Middle income households were hard hit in the ERC tariff review.