INFLUENCE OF ENERGY REFORMS ON KENYA’S ELECTRICITY SECTOR PERFORMANCE
INFLUENCE OF ENERGY REFORMS ON KENYA’S ELECTRICITY SECTOR PERFORMANCE
Beldine Wakajummah - Masters Student, Jomo Kenyatta University of Agriculture and Technology, Kenya
Dr. Patrick Kimaku (PhD) - Department of Business Administration, Jomo Kenyatta University of Agriculture and Technology, Kenya
ABSTRACT
The main aim of this study was to establish the influence of energy reforms on the performance of Kenya’s electricity sector. The study aimed to determine the influence of industry regulation, restructuring of utilities, private sector participation, and customer service on the performance of the electricity sector in Kenya. Four theories guided this study: compliance theory, agency theory, resource-based theory or view (RBV) and dynamic capability theory. The target population for this study was 14,768 employees from the electricity sector state organizations, i.e., Kenya Electricity Generating Company Plc, Energy and Petroleum Regulatory Authority, Kenya Electricity Transmission Company, Kenya Power and Lighting Company Plc, Rural Electrification and Renewable Energy Corporation, and Geothermal Development Company. A stratified sampling technique was used to sample the respondents through proportional allocation to ensure equal representation of each stratum. This was followed by simple random sampling to arrive at a sample population of 390. The study preferred a descriptive research design with a semi-structured questionnaire as the main data collection tool. A pilot study was conducted on 39 respondents to detect weaknesses in design and instrumentation. Descriptive and inferential statistics were used to analyze the collected data. The study revealed that industry regulation, customer service, utilities’ restructuring, and private sector participation all have a moderate to great influence on the performance of the electricity sector. ANOVA, t-test, p-values and coefficient of determination were used in the data analysis from which data were presented using tables. From the model summary, the R-Square value of 0.723 implied that the independent variables (energy reforms) would contribute 72.3% of the dependent variables (performance) when the external factors are not eliminated from the model. From the ANOVA test, the computed F was higher than the F critical (at 4, 301; F critical = 2.841), indicating the model’s overall importance. From the regression analysis, the model indicated that holding the predictor variables constant, Kenya’s electricity sector performance would be 5.970. Regression analysis findings indicated that industry regulation, utilities’ reorganization, private sector participation, and customer service had respective beta coefficients of 0.612, 0.898, 0.755, and 0.734. The study concluded that industry regulations and private sector participation are crucial to the performance of the electricity sector by providing the structure, framework, and alternative options for guaranteeing investments for sector development. The study recommends creating a more conducive environment where the private sector can continue participating, developing regulations to align the sector to the continually changing environment, investing in robust customer service, and establishing policies to enhance the performance of the restructured utilities.
