Kenya leaps to top of Africa’s electricity regulation index, matching Senegal

Kenya has emerged as Africa’s top performer in electricity regulation, sharing the first spot with Senegal in the 2024 edition of the Electricity Regulatory Index (ERI).

Published by the African Development Bank (AfDB), the report shows that both countries achieved a leading composite index score of 0.892.

The rank marks a major leap for Kenya, which climbed from fifth place in 2022, the previous edition, to the top of the rankings.

Uganda, Namibia and Tanzania round out the top five performers out of the 43 countries surveyed, underscoring East Africa’s growing strength in power sector oversight and reform.

Sao Tome and Principe, Republic of Congo, Guinea, Gabon, and Djibouti were the lowest-ranking countries, with Sao Tome and Principe scoring the lowest overall.

Kenya’s milestone reflects significant progress in creating a stable, transparent, and efficient regulatory environment, key factors attracting investment, promoting innovation, and enhancing service delivery in the energy sector.

According to the lender, a strong regulatory performance is critical to achieving universal access to electricity, as it ensures fair pricing, protects consumers and supports the sustainable expansion of power infrastructure.

The ERI measures the development of regulatory frameworks in electricity sectors using three key dimensions: Regulatory Governance, Regulatory Substance, and Regulatory Outcomes.

A score of 1.0 indicates optimal regulatory performance, whereas a figure far less than 1.0 implies declining effectiveness or shortcomings in the regulatory framework.

Kenya’s improved standing in the period under review was driven in part by its exceptional performance in the Outcome Index, where it ranked first across the continent, with a score of 0.854, a 59 per cent increase from its 2022 performance.

This metric measures the effectiveness and impact of regulatory frameworks as perceived by electricity consumers and utility operators.

Senegal and Zimbabwe followed closely behind in second and third positions, respectively.

In terms of regulatory substance, which assesses how well regulators utilise their legal mandates to govern the electricity sector, Kenya ranked fourth with a score of 0.946, following Rwanda, Uganda and Senegal.

Similarly, in regulatory governance, which gauges the robustness of the legal and institutional foundation of regulators, Kenya again ranked fourth, behind Uganda, Tanzania and Senegal.

Kenya’s scores in these two categories also rose by a combined three per cent compared to 2022, reflecting steady progress in regulatory maturity.

Generally across the continent, the report notes that for the first time since the Index was introduced in 2018, Africa’s overall average ERI score has crossed the 0.600 mark.

“Notable improvements have been recorded across all pillars of the ERI, and the overall average ERI score has hit an all-time high of 0.668 from 0.495 in 2022,” the report reads.

“The number of countries with an ERI score below 0.500 has reduced from 19 in 2022 to six in 2024, while the highest ERI score has increased from 0.846 to 0.892.”

It adds that the value of the lowest ERI score has also increased by more than 300 per cent from 0.101 in 2022 to 0.326 in 2024.

The lender attributes the overall positive trend across the continent to progressive reforms undertaken by many countries since 2018.

It highlights that by 2022, at least 30 African nations had amended or introduced new energy laws and regulations, addressing earlier gaps highlighted by previous ERI editions.

These legal reforms, according to the lender, have strengthened regulatory institutions, improved investor confidence and helped align electricity markets with global standards.