Kepsa roots for minerals cash initiative

Kenya Private Sector Alliance (Kepsa) wants the government to subscribe to a system that will facilitate full disclosure of money earned from minerals.

The Extractive Industries Transparency Initiative (EITI), says the alliance, will promote transparent use of revenue got from oil, gas and mining sectors.

Kepsa’s quest for embracing EITI before Kenya finds commercial crude oil deposits is aimed at avoiding the mentality of over depending on oil (Dutch syndrome) that distorts other key sectors of the economy.

“If citizens do not adequately prepare for accountable management of resources, discovery of oil and minerals can create avenues for conflict and corruption,” said Kepsa chairman Patrick Obath.

He said with EITI, Kenya will benefit from improved investment climate with a clear signal to investors and international financial institutions that it is committed to greater transparency.

Mr Obath said the system facilitates full disclosure of information as well as seeks among others, to put a cap to amounts of money companies remit to the government from natural resources found and sold.

The initiative supports transparency and governance with publication and verification of payments made.

Mr Obath said EITI was launched in 2003 with the aim of increasing openness of payments made by firms to governments and state-linked entities as well as revenues of host countries.

He said payments and revenues are reconciled by a credible independent administrator who applies international auditing standards to all companies including state-owned enterprises.

According to Transparency International Kenya, revenues from oil, gas and mining firms, in form of taxes, royalties and signature bonuses should be engines for social economic growth.

“In many countries, money from oil, gas and mining is associated with poverty, conflict and corruption commonly known as “resource curse” said the watchdog’s programme co-ordinator David Mwangangi.

Responsibility for embracing EITI rests with implementing countries working in partnership with representatives of local civil society and operational companies.