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Industries to benefit from power rebates by next month

Martin Mwita @MwitaMartin

Manufacturers could start getting refunds on their electricity bills starting next month, the government has hinted, as it moves to cut down their cost of power by about 30 per cent.

This is in the planned ‘rebate’ initiative which will see manufacturers and major industries deduct 30 per cent of their electricity bill from earnings that is subject to taxation, a provision covered under the Finance Bill 2018.

Industry Cabinet secretary Peter Munya yesterday said the plan is awaiting Cabinet approval, having already been agreed upon by Treasury, the Energy ministry and his office.

Cost of business

“We want to give industries definite rebates to bring the cost of doing business down. A technical report has already been done between my ministry, Treasury and Energy, the report has been tabled in the Cabinet sub-committee and in a very short time it will find its way to the Cabinet,” Munya said in Mavoko, Machakos County, during the official opening of the Sh7 billion Mars Wrigley state-of-the-art factory.

The manufacturing sector is a key pillar in the Big Four agenda, with the government seeking to raise its contribution to the gross domestic product from the current 8.5 per cent to 15 per cent by 2022. It also plans to create one million new jobs in the sector.

The high cost of power, which stands at between Sh11 and Sh21 per kilowatt hour (kwh), has in recent times dampened manufacturing.

A number of industries have closed shop in favour of neighbouring countries such as Ethiopia, where tariffs are as low as Sh3 per kwh.

Neighbouring countries

In his speech, read by Munya, President Uhuru Kenyatta said the government has made critical investments such as increasing power generation, building modern roads and railways, expanding ports and airports and investing in education and health as the driving forces of a well-trained and productive workforce.

“My administration remains committed to catalysing even more private sector-led growth in the manufacturing sector,” he added.

The Wrigley’s mega project, which is built on a 20-acre piece of land was officially opened yesterday, having moved from its old plant at Industrial Area in February last year.

The new facility represents one of the largest foreign direct investments in Kenya in recent times. It has the capacity of producing about 7.8 billion pellets of chewing gum annually.

The manufacturer of Big G, PK, Double-mint, Juicy Fruit and Orbit chewing gum brands is expected to utilise the increased capacity to serve a growing market that includes Uganda, Tanzania, Rwanda, Burundi, Ethiopia, Djibouti, DRC and South Sudan.

“Kenya has been our main confectionery hub in Africa. We are currently exporting products from here to 14 countries in Africa and the Middle East,” said Duncan McCulloch, regional managing director, Middle East and Africa.

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