We must ensure that our newfound natural resources remain blessings
A worker at Base Titanium display the mineral produced at their factory in Kwale County in this photo taken on 28th January 2014. PHOTO: Kevin Odit / NATION
What you need to know:
- Given our track record in managing public funds, how will we assure the citizens of accountability by properly managing the natural resources?
- Transparency should guide basic legal instruments such as the Mining and Petroleum Acts. As a starting point, the government should consider joining the Extractive Industries Transparency Initiative (EITI).
- Preventive agencies such as the Ethics and Anti-Corruption Commission and the Office of the Auditor-General should lay groundwork to ensure that the public benefits from the discovery of these resources.
We are on the verge of an economic renewal if we consider the recent discovery of mineral resources in several parts of the country.
There have been discoveries of titanium in Kwale, oil and water in Turkana, and coal in Kitui. Kenya has joined the league of other countries in Africa endowed with natural resources.
These discoveries should provoke us to consider some questions: How well are the resources going to be managed? What mechanisms are we putting in place to promote accountability and transparency in the exploitation of these resources? Given our track record in managing public funds, how will we assure the citizens of accountability by properly managing the natural resources?
In Africa, abundance of natural resources, particularly oil, has in many cases been considered a curse rather than a blessing. One can only hope that this is not the fate that awaits Kenya. In a way, we are lucky that there are examples of the pitfalls to avoid.
Transparency should guide basic legal instruments such as the Mining and Petroleum Acts. As a starting point, the government should consider joining the Extractive Industries Transparency Initiative (EITI). This is a voluntary membership of about 30 countries globally with the aim of increasing transparency and accountability in the management of revenue from natural resources.
The EITI standard makes it obligatory for oil, gas, and mining companies to publish what they pay governments and the governments to publish what they receive from these companies. Such gestures will partly assure Kenyans that every resource extracted from the land is accounted for.
BOSTWANA, NAMIBIA AND SOUTH AFRICA
We must aim to emulate countries like Botswana, Namibia, and South Africa, who have demonstrated the benefits of managerial accountability in the utilisation of natural resources for the national good. Their economies are booming, their infrastructure is highly developed, service delivery in the public sector has improved, and the people have been lifted from an impoverished state.
The emergence of Brazil, Russia, India, China, and South Africa (BRICS) as strong economies could be attributed to their good management of mineral resources. Kenya should be looking for inspiration in that direction.
The ministries of Mining and Energy and Petroleum deserve praise for initiating the Mining Act 2013 and the Petroleum Act 2012 respectively.
The audit clauses in the draft Mining and Petroleum Bills must prescribe a strong accessibility right for the Auditor-General to the records and books of the entities (both public and private) that will be involved in the exploitation of the resources.
The Act should include strong and robust governance provisions giving the Auditor-General and other governance agencies unlimited access to all documentation of the prospecting companies touching on financial projections and reporting, agreements and contracts, and revenues and remittances to the government.
It would be beneficial if the Bills explicitly spelt out how the two ministries will ensure prudent management and use of mineral resources as a way of complementing the Public Finance Management Act and the anticipated Public Audit Act 2014.
LAY GROUNDWORK
On a more proactive note, preventive agencies such as the Ethics and Anti-Corruption Commission and the Office of the Auditor-General should lay groundwork to ensure that the public benefits from the discovery of these resources. It was disheartening to observe recent attempts by the Ministry of Energy to seek alternative auditors for the oil sector on behalf of the Kenyan Government, with no prior consultations with the Auditor-General.
Proper consultations with this office in such an important audit exercise would reassure the citizenry and insulate the ministry from potential conflict of interest.
The Office of the Auditor-General is determined to carry out its mandate to keep a close watch on these resources on behalf of the Kenyan people with the hope that our vision to be a middle income economy by 2030 can be on track.
It is up to us to ensure that the blessing of these resources does not turn into a curse, that their exploitation is controlled, monitored, and managed for the benefit of all Kenyans.
The writer is the Auditor-General of the Republic of Kenya.
