Energy Consumption and Performance of Manufacturing Sector in Kenya

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dc.contributor.advisorCharles Nzaien_US
dc.contributor.authorEdwin, Gwaro Ototo
dc.date.accessioned2023-02-10T09:34:23Z
dc.date.available2023-02-10T09:34:23Z
dc.date.issued2022
dc.descriptionA Research Project Submitted to the School of Business,Economics and Tourism in Partial Fulfillment of the Requirement for the Award of Master of Economics (International Trade And Finance) of Kenyatta Universityen_US
dc.description.abstractKenya's manufacturing sector contributes 70% of the industrial sector production with the combined contribution of construction, building and quarrying outputs to the remaining 30%. Energy plays critical role in manufacturing. The use of energy in industry affects every single citizen directly through the cost of goods and services, the quality of manufactured products, the strength of the economy, and the availability of jobs. It is utilized on production process thus efficient consumption of energy reduces the cost of doing business. Kenya Vision 2030 Economic Development Plan recognizes the manufacturing sector, as one of the fundamental pillars of sustainable annual GDP growth of 10%. Manufacturing stands tall as a key pillar in the Big Four Development Agenda by the National Government of Kenya, where manufacturing is seen to be the key to unlocking the success of the other development goals, namely: Universal Healthcare, Affordable Housing, and Food Security. The premises to increase the share of the manufacturing sector to GDP from an approximate existing 8.5% to a projected 15%according to the goals of the Big 4 Agenda. Numerous problems, however, hinder the results as shown by the decline in the sector from 9.6% in 2011 to 9.2% in 2012. The Kenyan manufacturing companies spent about 40% of the production overhead on energy leading to increased cost of operation thereby negatively affecting their overall performance. The purpose of this study therefore, was to investigate the effect of energy consumption on performance of manufacturing in Kenya. The study's specific objectives were to determine effect of renewable energy consumption on performance of manufacturing sector in Kenya and to determine effect of non-renewable energy consumption on performance of manufacturing sector in Kenya. The research project employed a non-experimental research design to evaluate economic models. The research utilized secondary data sources to gather relevant information to achieve our analysis aim and address the research gap while employing a multivariate time series regression model. The study used annual timeseries data from the period 1980 to 2019. All relevant time-series tests were performed. The findings revealed that energy consumption had both bidirectional positive effects to manufacturing performance in Kenya. The findings also revealed that there was cointegration and therefore, existed a long run relationship between the manufacturing performance and energy consumption. The study therefore, concluded that in an energy efficiency nation and in a well-developed energy market, manufacturing form thrives and the country product competitiveness increases. In the long run, the speed of cointegration is divergence hence no equilibrium thus implying volatility and instability of the energy market affecting energy consumption. Based on the findings and the conclusions, the study recommends smoothening of energy consumption caused by renewable energy instability through deployment and investment of storage technology especially during excess energy supply and smart grid system to regulate supply and demand at point of metering.en_US
dc.description.sponsorshipKenyatta Universityen_US
dc.identifier.urihttp://ir-library.ku.ac.ke/handle/123456789/24749
dc.language.isoenen_US
dc.publisherKenyatta Universityen_US
dc.subjectEnergy Consumptionen_US
dc.subjectPerformanceen_US
dc.subjectManufacturing Sectoren_US
dc.subjectKenyaen_US
dc.titleEnergy Consumption and Performance of Manufacturing Sector in Kenyaen_US
dc.typeThesisen_US
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