As much as the cost of living in the country has escalated in the last few months, most Kenyans consider their country as one of the most comfortable countries to live in Africa in terms of service provision and availability. To some extent, I can concur. How many countries can boast of the kind of mobile telephony we have? The ease of money transfer we have is one of the best and fastest in the world, thanks to M-Pesa, whose annual turnover is far bigger than even that of Western Union. There has been endeavours to replicate the service elsewhere in the world without much success.
But all that said, let's look at our economy critically and analyze it statistically. We can examine it from the most important sectors that form basis of economic power:
But all that said, let's look at our economy critically and analyze it statistically. We can examine it from the most important sectors that form basis of economic power:
Energy
Production-Consumption Trend
Literacy Levels
Political Maturity
Healthcare Provision
Energy
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| Masinga Dam, main reservoir of Seven Forks Dams |
Cost of energy has a very direct bearing on the living standards and living costs within an economy. Manufacturers always pass the energy cost down to the consumer. This means that the more the energy cost, the more expensive the finished product. This is very unattractive to even potential investors since it makes investment too expensive and return margins too thin. An example of this is Bamburi Cement, about 60% of their operations cost is energy, which they pass down to the consumer. this means that 60% of the cost of the bag of cement is energy cost, so, if you buy a bag at, say, KSh. 730, KSh. 438 is cost of energy, without which, the bag would have gone down to KSh. 300 !If we were to bring the energy cost in production to 10%, the bag would cost KSh.330. This scenario is replicated in all locally manufactured goods and it is one of the reasons why locally produced goods tend to be more expensive than imports. And it is sad for example to see the Chinese contracted to build Kenyan roads importing cement from China instead of buying locally.
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| Three Gorges Dam on Yangtze River. Produces 22,500 MW. |
But why is energy cost so high in Kenya? By 2011, the population of Kenya was about 41,609,728 according to the World Bank. Kenya Electricity Generating Company (KenGen) is the largest power producing company in Kenya producing about 80 % of the electricity consumed in the country.The power production from geothermal, H.E.P and other sources by KenGen currently total to 882.4MW. If this represents 80% of Kenya's total power production, then it means the country's total power production stands at paltry 1103 MW. To get a grasp of what this means, let's compare it to other middle income earning nations, a target Kenya is aiming at with its Vision 2030. One such country is Argentina in South America. The choice of Argentina being its comparable population size to Kenya, which as of 2012 was approximately 41,281,631 which is slightly less than that of Kenya. As of 2006, the installed nominal power capacity of Argentina was 24,046 MW! This means that Kenya produces and consumes a paltry 4.59% of Argentina's power! Hence, it is next to impossible to reach the level of Argentina economically if we cannot match up their power production.
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| Yacyreta Dam, biggest Dam in Argentina producing 4, 050 MW |
Kenya relies on green energy for most of its power source, deriving a big chunk of its power from geothermal and H.E.P. As much as these means are Eco-friendly, given the aridity of Kenya, lack of technological advancement, H.E.P remains too expensive and way inefficient to be the backbone of power source. However, our Seven Forks Dams Project can borrow a leaf from the Three Gorges Hydro Electric Power Dam in China. The dam has 32 turbines, each with a capacity of 700 MW and 2 smaller turbines each producing 50 MW. This brings the total power production of that single dam to 22, 500 MW, about 20 times the total production of power by Kenya! Our Tana River may not be anywhere as big as Yangtze River, on which the Three Gorges Dam is built but employing the technology used in building the Three Gorges Dam, we can surely quadruple the output of our Seven Forks Dam.
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