Columnists
Kenya should reactivate extractive sectors to attract FDIs, create jobs
Friday January 19 2024
Artisanal gold miners work at one of the mining sites. FILE PHOTO | NMG
About 10 years ago Kenya was actively involved in capacity building for the extractives (mining, oil and gas) sector, an effort that was generously funded by multilateral and bilateral agencies. Legal and regulatory frameworks for mining, oil and gas were developed while universities and TVETs developed curricula for extractive skills.
Buy-in and expectations from stakeholders and communities were quite high. The justification for these efforts was to attract foreign direct investments (FDIs) and create wealth from natural resources while building transferable skills and jobs.
However, for various reasons, the Jubilee government in its second term that ended last September, dropped attention on extractives to focus on transport infrastructure.
I also believe that the merging of Mining and Petroleum in one ministry diminished efforts to operationalise mining policies and masterplan.
In respect of oil and gas, it was mainly the collapse of global oil prices in 2014/15 that killed FDI incentives to develop Turkana oil resources.
Globally, oil and gas development was impacted by campaigns against funding for new fossil fuel production. However, of late opposition to oil and gas funding appears to have waned with emphasis shifting to managed energy transition.
Further, climate advocacy decisively killed Kitui coal potential as the authorities silently watched, and as Kenya continued to import coal for heavy users.
In respect of mining, the only visible and beneficial success that came out of initial mining reforms was the Kwale Base Titanium venture that is reported to be winding up operations after exhausting available ores.
The last time we heard from the Mining authorities, mapping of Kenya’s minerals potential had been completed but results were yet to be published, nor invitations for investments done.
With the world focused on renewable energy technologies, the reliable availability of critical energy minerals and specifically rare earth minerals is the new global focus.
Until Kenya finalises the minerals survey, we will not know if we have them, and we may be missing out on FDIs for green technology minerals.
As for Turkana oil and Kitui coal, it is not too late to commercialise these energy resources that still have value in terms of forex generation and jobs.
Our regional neighbours Uganda and Tanzania never abandoned extractives as they progressed towards oil and gas development and expansion of mining portfolios.
Specifically for Uganda’s oil, this was despite spirited and well-funded disruptive civil and climate advocacy.
The writer is a petroleum consultant. [email protected]
