: 10.56472/25835238/IRJEMS-V5I6P121
Owuoth Habil Onyango, Obange Nelson, Ghabon Kuso Yasin. "Long and Short Span Dynamics of Electricity Usage on Kenya's Manufacturing Sector Growth" International Research Journal of Economics and Management Studies, Vol. 5, No. 6, pp. 183-193, 2026. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V5I6P121
The manufacturing sector is touted as a powerful tool in socioeconomic transformation. However, over the past three decades, Kenya has been experiencing stagnation in the sector's growth. This stagnation is about 10 per cent below the 15 per cent benchmark, raising concern about the sector's capacity for transformation in the country. Blamed for this stagnation are electricity consumption constraints, despite Kenya's efforts to improve grid supply. The literature suggests that constraints on electricity consumption impede manufacturing activities, yet Kenya receives limited empirical attention. Using a correlational design, this study examines the short- and long-run effects of electricity consumption on manufacturing sector growth in Kenya. The World Bank and the Kenya National Bureau of Statistics provided time-series data from 1965 to 2024, during which the sector stagnated. The Augmented Solow model underpinned this study with the Autoregressive Distributed Lag model and Error Correction Mechanism aiding parameter estimation. The findings reveal that electricity consumption has a positive and significant short-run and long-run effect on manufacturing sector growth in Kenya. Despite being positive, the effect is marginal, suggesting that Kenya's manufacturing sector struggles with electricity consumption constraints due to the high cost and unreliability of power supply. The study concluded that electricity quantity alone was insufficient to propel manufacturing growth unless accompanied by affordable tariffs and efficiency improvement—policy interventions to priorities reliability of electricity supply and affordability to enhance long-term sector growth in Kenya.
[1] Abbasi, K. R., Hussain, K., Abbas, J., Adedoyin, F. F., Shaikh, P. A., Yousaf, H., & Muhammad, F. (2021). Analysing the role of the industrial sector's electricity consumption, prices, and GDP: A modified empirical evidence from Pakistan. AIMS Energy, 9(1), 29-49.
[2] Abokyi, E., Appiah-Konadu, P., Sikayena, I., & Oteng-Abayie, E. F. (2018). Consumption of electricity and industrial growth in the case of Ghana. Journal of Energy, 2018, 1–11.
[3] Aderemi, T., A. and Sikwela, M., M. (2025). Electricity consumption and industrial outputs in the economic community of West African states: Evidence from a Panel Dynamic Ordinary Least Squares and Granger Causality. International Journal of Energy Economics and Policy, 2025, 15(3), 1-7.
[4] Ajibola, A. A., Gbemi, M. S., Aderemi, T. A., and Yusuf, M. O. (2021). Impact of electricity supply on the performance of small and medium-scale enterprises (SMEs) in Nigeria: A Case Study.
[5] Anyanwu, C. O, & Kur, K. K. (2024). Impact of energy consumption on industrial sector performance. SAGE Open: 1–14. DOI: 10.1177/21582440241298856.
[6] Asaleye, A., J. et al (2021). Electricity consumption and manufacturing sector performance: evidence from Nigeria. International Journal of Energy Economics and Policy. 11(4), 195-201.
[7] Attigah, B., & Mayer-Tasch, L. (2016). Productive use of energy: The Impact of electricity access on economic development: A literature review.
[8] Azolibe, C. B. and Okonkwo, J. J. (2020). Infrastructure development and industrial sector productivity in Sub-Saharan Africa. Journal of Economics and Development Vol. 22. No. 1, 2020 pp. 91-109
[9] Bataille, C., & Melton, N. (2017). Energy efficiency and economic growth: A retrospective CGE analysis for Canada from 2002 to 2012. Energy Economics, 64, 118–130.
[10] Brown, R., L. Durbin, J., & Evans, J. M. (1975). Techniques for testing the consistency of regression relationships over time. Journal of the Royal Statistical Society. Vol. 37, No. 2
[11] Cantore, C., León-Ledesma, M., & McAdam, P. (2017). The role of the manufacturing sector in driving economic growth in developing countries. Journal of Development Economics, 123, 90-105.
[12] Cilliers, J. & Ngundu, M. (2025). Manufacturing thematic futures. Published online at futures.issafrica.org. Retrieved from https://futures.issafrica.org/thematic/07-manufacturing/ [Online Resource] Updated 16 September 2025.
[13] Danmaraya, I. A. & Hassan, S. (2016). Energy consumption and manufacturing industry performance: Evidence from low-income Sub-Saharan African countries. International Energy Journal, 16, 57–64.
[14] Ebhota, W. S., & Tabakov, P., Y. (2018). The role of small hydropower electrification schemes in socioeconomic development in Nigeria. International Journal of Low-Carbon Technologies, 13(4), 311-319.
[15] Eke, F. A., Okoi, O. B., & Eke, I. C. (2018). Institutional quality, energy consumption mix and industrial sustainability in Nigeria. African Journal of Applied and Theoretical Economics, 4(1), 73–94.
[16] Eke, I. C., Eke, F. A., & Edom, A. E. (2023). Infrastructure and manufacturing sector performance in Nigeria. International Journal of Research and Scientific Innovation (IJRSI) ISSN No. 231-2705. DOI: 10.51244/IJRSI | Volume X Issue VII July 2023.
[17] Ekong, U. M., Isaac, U. E., & Isaac, S. E. (2021). Energy consumption and sectoral performance in Nigeria: New growth evidence from an ARDL model for consideration. Asian Basic and Applied Research Journal, 4(2), 103–119.
[18] Elliott, R. J., Nguyen-Tien, V., & Strobl, E. A. (2021). Power outages and firm performance: A hydro-IV approach for a single electricity grid. Energy Economics, 103, 105571. https://doi.org/10.1016/j.eneco.2021.105571
[19] EPRA (2024) Energy & petroleum statistics report for the financial year ended 30 June 2024
[20] Fried, S., & Lagakos, D. (2023). Electricity and firm productivity: a general-equilibrium approach. Am. Econ. J. Macroecon. 15 (4), 67–103. https://doi.org/10.1257/mac.20210248.
[21] Ghouse, G (2025). Impact of energy prices, consumption, and government effectiveness on manufacturing output: Evidence from Pakistan. International Journal of Advanced Social Studies ISSN: 3006-1776 (Print), 3006-1784 (Online)
[22] Gujarati, D. N., & Porter, D. C. (2009). Basic econometrics (5th ed.). New York, NY: McGraw-Hill/Irwin.
[23] Hadi, Muhammad, H., et. al. (2021). The role of electricity and energy consumption in influencing industrial development across regions in Indonesia. International Journal of Energy Economics and Policy 11 (3), S. 403 - 408.
[24] Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modelling (PLS-SEM) (3rd ed.). Thousand Oaks, CA: Sage.
[25] Halkos, G., de Alba, J. M., & Todorov, V. (2021). Analysing the manufacturing sector and selected development challenges: A panel data analysis.
[26] Hatem, G., Zeidan, J., Goossens, M., and Moreira, C. (2022) "Normality testing methods and the importance of skewness and kurtosis in statistical analysis," BAU Journal of Science and Technology: Vol. 3: Iss. 2, Article 7. DOI: https://doi.org/10.54729/KTPE9512
[27] Idogun, H., I. (2025). Electricity consumption and manufacturing sector output in Nigeria: An ARDL approach. International Journal of Business Management and Economic Review Vol. 8, No. 03; 2025 ISSN: 2581-4664
[28] Iheonu, C. O., Mbohwa, C., & Asongu, S. (2025). Industrial development in Africa: The role of energy price volatility, Energy Sources, Part B: Economics, Planning, and Policy, 20:1, 2484717, DOI: 10.1080/15567249.2025.2484717
[29] Inedu, H., Idoko, S A., & Abdul, M Y. (2025). Impact of Electricity Consumption on Manufacturing Sector Growth in Nigeria. International Journal of Scientific Development and Research (IJSDR) www.ijsdr.org
[30] Institute of Economic Affairs (2020). A Briefing on Public Finances: How Deep a Hole Are We In? International Energy Agency (2012). World Energy Outlook Report. https://www.iea.org/reports/world-energy-outlook-2012
[31] Jorgenson, D.W. (1984). The role of energy in productivity growth. Energy J. 5 (3), 11–26. https://doi.org/10.5547/ISSN0195-6574-EJ-Vol5-No3-2.
[32] Kaldor, N. (1966). Causes of the Slow Rate of Economic Growth of the United Kingdom. Cambridge University Press.
[33] KAM (2024). Manufacturing Priority Agenda (MPA) 2024. Steering economic growth through the manufacturing sector for the common good.
[34] Keen, S., Ayres, R. U., & Standish R., (2018). A note on the role of energy in production. Elsevier. http://creativecommons.org/about/downloads
[35] Korkmaz, O. (2022). Do oil, coal, and natural gas consumption and rents impact economic growth? An empirical analysis of the Russian Federation. Resources Policy, Vol 77, 102739
[36] Kouakou, D. C. M. (2026). Do power outages hurt registered firms' access to finance in developing countries? JEL codes: G20; H54; L94; O13; O16.
[37] Koyck, L. M. (1954). Distributed Lags and Investment Analysis, North-Holland, Amsterdam.
[38] Macharia, K., K. Gathiaka, J., K. & Ngui, D. (2022). Energy efficiency in the Kenyan manufacturing sector. Journal of Sustainable Development; Vol. 15, No. 3; 2022. ISSN 1913-9063 E-ISSN 1913-9071
[39] Mensah, J.T. (2024). Jobs! Electricity shortages and unemployment in Africa. J. Dev. Econ. 167, 103231. https://doi.org/10.1016/j.jdeveco.2023.103231.
[40] Mutunga, D., & Owino, E. (2017). Moderating role of firm size on the relationship between micro factors and financial performance of manufacturing firms in Kenya. Journal of Finance and Accounting, 1(1), 14 -27.
[41] Ndubuisi, G., Avenyo, E., V., & Asiama, R., (2025). Dancing on the grid: Electricity crises, energy vulnerability, and manufacturing jobs in South Africa, Energy Policy 202 (2025) 114534.
[42] Nnyanzi, J, B., Kavuma, S., Sseruyange, J., & Nanyiti, A. (2022). The manufacturing output effects of infrastructure development, liberalisation and governance: evidence from Sub‑Saharan Africa. Journal of Industrial and Business Economics 49:369–400. https://doi.org/10.1007/s40812-022-00216-2
[43] Olawumi, R., O. & Oriola, A. (2020) Energy Consumption and Industrial Output Growth in Nigeria (1981-2018). International Journal of Humanities & Social Studies, ISSN 2321 – 9203.
[44] Omosebi, A., Aladejana, S. A., Ajetunmobi, K. T., & Asagunla, T. M. (2019). Disaggregated Energy Consumption and Industrial Output in Nigeria. International Journal of Academic Research in Economics and Management Sciences, 8(4), 15–26.
[45] Omotosho, T. D., & Ogu, C. (2021). Electricity power consumption and manufacturing sector performance. Indiana Journal of Humanities and Social Sciences, 2(8), 1-10.
[46] Onabote, A., Ojamaliya, A., Oduntun, E., Oluwasegun, E., & Okafor, V. (2021). Foreign direct investment, energy infrastructure and manufacturing output in Nigeria. International Journal of Energy Economics and Policy, 2021, 10 (3), 163-169.
[47] Ototo, E., G. (2022). Energy consumption and performance of the manufacturing sector in Kenya, Unpublished Master's Dissertation, Kenyatta University, Kenya.
[48] Oyeyimi, M., A. & Onuoha, F., C. (2020). Electricity consumption and industrial output in Nigeria. International Journal of Arts and Social Sciences, Vol. 1, No 2
[49] Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16, 289–326.
[50] Quadri, S. T. & Bukola, M. O. (2022). Impact of electricity consumption on manufacturing output in Nigeria from 1980 to 2021. Research Gate. https://doi.org/10.21203/rs.3.rs-2134279/v1
[51] Raza, S. A., Jawaid, S. T., & Siddiqui, M. H. (2016). Electricity consumption and economic growth in South Asia. South Asia Economic Journal, 17(2), 200-215.
[52] Sankaran, A., Kumar, S., K A., & Das, M. (2019). Estimating the causal relationship between electricity consumption and industrial output: ARDL bounds and Toda-Yamamoto approaches for 10 late-industrialized countries. Heliyon. https://doi.org/10.1016/j.heliyon.2019.e01904
[53] Sarkodie, S. A., & Adom, P. K. (2018). Determinants of energy consumption in Kenya: a NIPALS approach. Energy, 159, 696-705.
[54] Simon, M. K., & Goes, J. (2011). Correlational Research.
[55] Stern, D.I., Kander, A., 2012. The role of energy in the industrial revolution and modern economic growth. Energy J. 33 (3). https://doi.org/10.5547/01956574.33.3.5.
[56] UNIDO (2025). Industrial Development Report 2026. The Future of Industrialization. Building Future-ready Industries for Sustainable Development. Vienna.
[57] Wan, X., Kazmi, S. A. A., & Wong, C. Y. (2022). Manufacturing, exports, and sustainable growth: evidence from developing countries. Sustainability, 14(3), 1646.
[58] Wangui, M. (2019). Key challenges holding the manufacturing sector in Kenya, Kenya Tribune, 15 July 2019. www.kenyatribune.com
[59] Zhang, Q., & Wang, Q. (2023). Digitalization, electricity consumption and carbon emissions: Evidence from manufacturing industries in China. International Journal of Environmental Research and Public Health, 20, 3938. https://doi.org/10.3390/ijerph20053938
[60] Zheng, S., Wang, R., Mak, T. M., Hsu, S. C., & Tsang, D. C. (2021). How do energy service companies moderate the Impact of industrialization and urbanization on carbon emissions in China? Science of the Total Environment, 751, 141610.
Consumption, Electricity, Kenya, Manufacturing.