Petroleum production is a slippery path that Kenya should navigate carefully

In 2016, President Kenyatta in a memo to parliament requested that the legislators change the Petroleum (Exploration, Development and Production) Bill, such that revenue allocation to local communities stood at 5 percent instead of the 10 percent parliament had just passed.

This move has caused uproar among leaders from the Turkana and Kerio valley region.

Ideally, the Mining Bill 2016 provides that the National government be entitled to 70 percent of revenue from mineral and mineral oils, 20 percent for the county government and 10 percent for the host community. This is similar to what parliament had included in their earlier bill.

However, the call for higher revenue sharing rates from petroleum remains an enigma for the government.

“I understand where the Turkana leaders are coming from but if you open that door…We are building a pipeline from Turkana to Lamu passing through Samburu, Isiolo and Garissa. What happens if all these counties demand their share? “Said Andrew Kamau Petroleum Principal Secretary.

Mineral discovery-particularly petroleum, has a history of causing instability and conflict in Africa, especially when huge sections of people, do not believe they are benefitting as they should.

For instance, 5 percent of violent conflict in South Sudan is resource related, Nigeria has a similar rate. Resource-based conflict also happens in form of riots and conflicts with Libya and Nigeria leading the pack. This is one of the reasons why research from the Institute for Security Studies, shows that even though Africa has many mineral-rich countries, there is still a high level of under-development and poverty.

Kenya should be careful not to go down this road and instead learn from our neighbors while charting a different path. One such path is that of local content policies where the government sets up policies that support and nurture local companies to participate throughout the petroleum industry value chain.

This includes having local Jua Kali industries in Turkana providing simple goods and services needed by companies in the oil industry. These policies involve strict regulation and can sometimes yield less profit; however, over time the benefits far outweigh the risks.

The aim of these policies is to-with time, develop these local players to a point where they flourish even in other sectors of the economy independent of oil. This creates employment, ensures that the local community benefits and that the economy is not crippled by overdependence on oil.






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