We have failed the first test on Turkana oil
Across the developing world, an abundance of economic resources has been associated with poverty and dictatorship. This is the essence of the resource curse. And it is what might befall Turkana County if we continue along the path we appear to have taken with regard to the management of the oil sector.
Perhaps no other country embodies this reality more than the Democratic Republic of Congo (DRC). It has been estimated that the DRC has Sh240 trillion in mineral reserves. The country is also rich in hardwood forests and freshwater. The mighty Congo River alone has the potential to produce enough hydroelectric power to supply all of East and Central Africa. And with a population of more than 80 million, the DRC also has a significant human capital pool and market. By all estimates, it is a wealthy country.
Yet the vast majority of the DRC’s population lives in squalor and under chronic insecurity. Maladministration under the Belgian colonialists gave way to more maladministration after independence. From Mobutu Sese Seko to Felix Tshisekedi, the country has never known a government willing to convert its vast resources into improved living conditions.
When President Uhuru Kenyatta flagged off the first shipment of oil exports, one would have expected him to also outline, within reason, the financial details of the oil sector. Surely, he must know the fates of oil-rich countries like Nigeria, Angola, or Equatorial Guinea. The fact that we are not as oil-rich as these countries ought to have been a reason to try and do the right thing. The stakes were lower, so to speak.
Yet what we have received from State House is opacity. The government is yet to disclose the production sharing agreement with Tullow and its partners. We do not know the breakdown of costs and profits of the Early Oil Pilot Scheme (EOPS). And ominously, there have been delays in the establishment of the sovereign wealth fund that is to manage profits accruing from the commercialisation of natural resources.
In short, the government is behaving not unlike many of its resource-rich and obscenely corrupt counterparts across the continent.
However, the bigger problem will be the lost opportunity to improve our human capital. Turkana is one of the poorest counties in Kenya. Its people continue to lack easy access to schools, hospitals, and basic infrastructure. A smarter government would be working hard to convert the expected oil profits into higher quality human capital. Increasing school enrollment and improving learning outcomes, reducing infant and maternal mortality, and giving locals access to clean water and electricity ought to be top of the list of plans to use the oil windfalls. That would be the best investment of the profits and would have a bigger multiplier effect well into the future.
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The challenge, of course, is that this is not how our leaders think. Many have little appreciation of the potential wealth that we have in the form of human capital. If only they realised how much more in income taxes they would have access to, if they invested in our schools, hospitals, and created an enabling environment for every Kenyan to thrive. Infrastructure or commodities alone will never make us wealthy.
Our most enduring wealth is in our people. And the first step towards this wealth is by being transparent in how we use our natural resources. So far, Kenyatta has failed this test in the case of our nascent oil industry.
- The writer is an Assistant Professor at Georgetown University.
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DRCPresident Uhuru KenyattaTurkana oil