Kenya’s cost of power drops but economy flatlines

By Victor MUJIDU

In a positive development for consumers and businesses in Kenya, the cost of electricity has dropped by up to 13.7 percent following the strengthening of the Kenya shilling against major currencies.

 

This reduction in electricity prices is welcome news for many who have been struggling with high energy costs in recent months.

 

The strengthening of the Kenya shilling has had a direct impact on the cost of electricity, as the majority of the country’s power supply is sourced from hydropower and geothermal sources which are not affected by fluctuations in international fuel prices.

 

This stability in the cost of generation has allowed electricity providers to pass on the savings to consumers, resulting in lower bills for households and businesses.

 

The drop in electricity costs is expected to provide a much-needed boost to the economy, as lower energy prices can help reduce operating costs for businesses and improve disposable income for consumers.

 

This will ultimately lead to increased productivity and competitiveness in the market.

 

Overall, the decrease in electricity costs following the strengthening of the Kenya shilling is a positive development that will benefit both businesses and consumers in the country. It is hoped that this trend will continue in the future, providing further relief to Kenyan households and businesses.

 

Meanwhile, a March 2024 report from Stanbic Bank, shows that business operations have weakened slightly due to a reduction in output and new orders. This decline in activity suggests that the overall economy may be facing some challenges.

 

It is important for businesses to closely monitor their operations and make adjustments as needed to navigate these difficult conditions. It is essential for businesses to remain agile and adaptable in order to thrive in a changing economic environment.

 

The report highlights the importance of closely monitoring key performance indicators and making strategic decisions to ensure continued success in the face of shrinking output and new orders.

 

The headline PMI dropped from 51.3 in February to 49.7 in March, slipping below the neutral 50.0 barrier. The measurement indicated a little deterioration in operational conditions and was the lowest for the past three months.

 

After exhibiting the strongest recovery in more than a year in February, business activity in the Kenyan private sector took a turn for the worst in March.

 

The survey participants attributed the slight decline in output to a reduced inflow of new orders and cash flow issues. Firms reported an easing of price pressures that supported customer spending; thus, the survey’s indication of a fall in new orders was only marginal.