Royalties sharing team formed to unlock Sh7.5b

A miner prospects for gold in Ikolomani, Kakamega. [File, Standard]

A 15-member committee has been inaugurated to break the stalemate surrounding the sharing of Sh7.5 billion mining royalties stuck at the National Treasury.

The government has been collecting mineral royalties but holding it over the failure by the Treasury to unlock a legal instrument required to release of the funds.

Mining Cabinet Secretary Salim Mvurya, while inaugurating the Minerals Royalty Committee at his office on Tuesday, said the regulations are expected to be out by March.

The committee comprises members from the Treasury, Council of Governors (CoG), Office of the Attorney General, Commission for Revenue Allocation (CRA) and the Ministry of Industrialisation.

Mvurya said the Mining Act 2016 does not give details of how the royalties should be shared.

According to Section 183(5) of the Mining Act, the national government will be entitled to 70 per cent, the county government 20 per cent and the community where the mining operations occur will be entitled to 10 per cent of the revenue.

"We expect the committee to have completed its work and thereafter have the regulations gazetted and take them for implementation. The Treasury will start disbursement of the 20 per cent royalties to counties immediately. The committee will advise on how the host community should share the cash," said Mvurya.

Of the Sh7.5 billion being held at the Treasury, Sh5.25 billion (70 per cent) is for the national government, Sh2.3 billion (20 per cent) for counties and Sh750.39 million for the communities where the minerals are mined.

The money had accumulated over the last five years.

The National Treasury is yet to conclude the Public Finance Management (Royalty Fund Sharing) regulations in order to pave way for the disbursement of mineral royalties to counties and host communities.

The Mining CS also said that the Cabinet is working on a concept paper that will see all minerals from the country exported as finished products.

"We want the extraction of raw materials, processing and value addition to be in Kenya. The era of exporting mineral raw materials is over," he said.