KARIUKI: Early oil pilot a private sector boost

The launch of the pilot scheme to export crude oil via Mombasa is a historic and proud moment for Kenya as it marks the start of a period that we all hope will spur growth in this part of the world.

Watching President Uhuru Kenyatta flag off the first trucks headed to Mombasa, those of us who travelled to Lokichar for the event were happy that, finally, that first step has been taken so many years after the announcement was made that oil has been discovered in Turkana County.

The Early Oil Pilot Scheme has, inevitably, provoked robust debates on social media and the various other platforms on which Kenyans engage with questions about the viability of the scheme and how much money Kenya will eventually make from it.

Thankfully, the Mining ministry and Tullow Oil have helped to answer the questions as the government put in place the necessary infrastructure for the scheme to kick off.

Debates and discussions on this subject are necessary and should be encouraged but we should not lose the forest for the trees or miss the many opportunities for business and economic growth at every level that come with the developments associated with the scheme.

DEVELOP INFRASTRUCTURE

First, the scheme comes with an opportunity to develop infrastructure in Turkana. There is already progress in the form of the installation of a Bailey bridge at Kainuk.

The speedy construction of the bridge demonstrated that, with political goodwill, it is possible for the government to facilitate business and get things going.

Beyond that, the oil exploration has resulted in the construction and rehabilitation of local roads — the sort of long-term investment in infrastructure which, in turn, benefits residents and businesses in the area.

The exploration has brought new life to Turkana and there are now towns where investors have been encouraged to set up businesses that provide the basic comforts for travellers — a bed, shower and meals.

As the export scheme takes root and gains steam, demand for services will grow and, along with them, the opportunities that the private sector thrives upon.

There are bound to be opportunities for the private sector in the establishment of basic amenities to the bigger investments such as healthcare and schools for those who will work in those towns.

This is also likely to be the case for towns along the route where the oil trucks will routinely stop.

SECURITY

Peace and security is crucial if the scheme and eventual plans are to succeed. As President Kenyatta and his deputy William Ruto said at the launch, we must view the oil find as a blessing.

Violence is a deterrence to investors as nobody wants to put their money in a place where peace and stability is not assured.

Investors will be reassured of their safety and that of their workers if leaders in the North Rift counties work for the cohesion and integration of the communities there and for the violence that so often disturbs that region to become a thing of the past.

The communities, and especially the leaders, will need to see the export of crude oil as a sure sign of a brighter future for a region that has suffered neglect for long.

From what we saw at Lokichar, there is potential for it to become the North’s industrial town, a Thika of sorts, and a logistics and communication hub for that part of the region.

The private sector is happy that a plan that has been spoken of for a long time has finally had progress and there is, finally, an agreement on the sharing of revenues at all levels.

It is now upon Parliament to speedily process the Bill.

PILOT EXPORT

Tullow Oil is a member of the Kenya Private Sector Alliance (Kepsa) and we share in its joy because of this milestone. We have already begun to see from the pilot export scheme how the ‘Big Four’ agenda pillar of manufacturing and creation of jobs can be achieved as SMEs form linkages with big companies.

More than 3,400 Kenyans were employed through the supply chain in the field operations, which reached a peak in 2014. The number of Kenyans employed on the Tullow team in Turkana hit a high of 96 per cent in March 2016.

Local firms have benefited from Tullow’s expenditure in Turkana to the tune of $273 million (Sh27.3 billion) in procurement opportunities from 2011 and to 2016. In Turkana, contractors have spent about $25.2 million (Sh25.2 billion) with local suppliers. This is evidence that, with the right support, Kenyans have begun to reap the benefits of the oil find and these are the sort of opportunities that Kepsa seeks to grow.

Kenya is still some way from getting the full benefits of the oil but, from the progress so far, we have a reason to look forward to Phase Two and Three of the project — the oil pipeline and the refinery.

Ms Kariuki is the CEO of the Kenya Private Sector Alliance (Kepsa). [email protected].