Socio- Economic Impact Of Electrification On Micro And Medium-Sized Enterprises In Kibera Slum, Nairobi

Abstract

Illegal electricity connection is a challenge in urban slums in developing countries. Kenya is facing illegal electricity connections especially in informal settlements. This is associated with risks such as danger to human beings through electrocution, overload of the system leading to tripping and fire breakout among others. To mitigate against such risks, the Kenya Power and Lighting Company came up with GPOBA electricity expansion project to legally connect electricity to all slums in Kenya including Kibera in 2013. This became a component of the ongoing rural electrification program. This study examined the socio-economic impact of slum electrification with focus on GPOBA project in Kibera slum. The study used quarterly time series data for the period 2008 to 2017 obtained from Kenya Power and Lighting Company (KPLC), Micro and Small Enterprise Authority (MSEA) and Kenya National Bureau of Statistics (KNBS). Standard growth regression model was utilized to analyze the impact of legal electricity connections on the growth of micro and medium-sized enterprises in Kibera slum. The results indicated that compared to the period prior to the project, GPOBA project has promoted SMEs growth in Kibera. The growth has contributed to increased number of businesses and employment creation to the working force. This calls for intensification of legal electricity connections in the informal settlements.