Too many loose ends in mining sector
What you need to know:
- Related experience reveals that resource-rich developing countries often face challenges in translating the benefits from such discoveries into the improved welfare of citizens.
- Inaccurate data and information on the sector can sometimes inflame tensions between the various players, or lead to resource waste through poor governance, lack of accountability or corruption.
- There is a lot of information on mineral discoveries in several parts of the country and their monetary worth, how soon they will be exploited and the many companies that are being awarded tenders to exploit the resources.
Mining minister Najib Balala has been at loggerheads with firms in the extractive sector over their practice and returns to the government. A lot has come out of the exchanges relating to the responsible management of the country’s mineral resources.
We do not know why some mining certificates awarded to players in the sector were cancelled, who is saying the truth, and why there is a reluctance to pass mining laws. Is the government, just like the communities where minerals have been discovered, expecting too much from this nascent sector?
A report by the Africa Centre for Open Governance (AfriCOG), entitled ‘Mixed Blessing,’ published in 2014, says the combined revenue from mineral exports (excluding titanium and coal) is expected to earn Kenya over $240 million (Sh23 billion) annually. Oil and titanium revenues will boost this significantly. Since the announcement of the first discovery of oil in March 2012, Tullow Oil Company estimated that the oil reserves stood in excess of 600 million barrels.
The AfriCOG report calls for the establishment of a legal framework for the exploitation of the oil and gas deposits and the need for good governance in the sector.
Related experience reveals that resource-rich developing countries often face challenges in translating the benefits from such discoveries into the improved welfare of citizens. To avoid going down the same path, Kenya will have to adopt best practices.
INACCURATE DATA
Inaccurate data and information on the sector can sometimes inflame tensions between the various players, or lead to resource waste through poor governance, lack of accountability or corruption.
Largely, the issues that have dominated public debates have been governance challenges, including the inability of the government to manage transparently revenues from the sector, especially award issues, technical capacity to supervise the operations, lack of information on mining agreements and benefits to the county governments and communities.
Largely missing from the debates in the media have been the openness in the management of revenues from the sector, accountability and transparency in matters on technical operations of the extractives, mineral potential of the country and the people behind the firms awarded the rights to exploit minerals.
Kenya believes in secrecy when it comes to the extractive industry, having failed to sign global transparency and governance initiatives.
The 2014 Fraser Institute report on mining indicated that Kenya is the least attractive country for investors in the extractive industry in Africa. While Kenya is a member of the Open Government Partnership, the country has failed to sign the Extractive Industries Transparency Initiative (EITI) or pass an access to information law that ensures transparency and accountability.
There is a lot of information on mineral discoveries in several parts of the country and their monetary worth, how soon they will be exploited and the many companies that are being awarded tenders to exploit the resources. A number of laws are being developed at the national and county level on the extractive industry, thus the legal framework is still confusing.
The writer is the deputy chief executive, Media Council of Kenya
