Electricity Prices Are Killing Our Industries

Yesterday, Kenya Power reported a staggering KSh 30 billion in net profit for the financial year ended 30th June 2024 up from a KSh 3 billion net loss last year. The main reason behind this performance was the massive increase in power tariffs implemented in April last year. 

The year ended 30th June 2024 was the first year when the full impact of the tariff increment was reflected in Kenya Power's books. This resulted in sales rising by a massive KSh 40 billion. 

The company mischievously failed to provide data on growth in units of power sold. The truth is that sales revenues rose due to the tariff review as opposed to growth in power consumption. They also failed to provide data on system losses which means that the profits weren't due to increased efficiency but a rise in power prices.   

The second reason for the huge profits was a KSh 25 billion decline in finance costs following the appreciation of the shilling earlier in the year. Kenya Power has a lot of foreign currency denominated loans which are widely impacted by the exchange rate leading to losses or gains during conversion into shilling for financial reporting. Such gains or losses are just paper numbers as opposed to a real gain or loss in cash. 

Regime bloggers will be all over parroting these results as a prove that the government is working. But how does increasing electricity prices amount to work? It would be an achievement if the results were due to higher power consumption and reduced system losses. 

High electricity prices are killing our industries and causing high unemployment. Raising power prices isn't a sustainable way of covering up for the graft and inefficiency in our power sector.

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