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Why Kenya’s success in extractives depends on our schools

FINANCIAL STANDARD
By STEPHEN KURIA& BENARD AYIEKO | August 16th 2016
PHOTO: COURTESY

Kenya has made significant progress in highlighting the extractives sector as the next key source of growth.

The emergence of the Ministry of Mining will promote the growth of the extractives sector by shifting policy orientation, creating public awareness and getting the nascent sector to realise Vision 2030 goals.

The signing into law of the Mining Act 2016, which replaced the Mining Act Cap 306 of 1940, is a key milestone. The Act has breathed new life into a sector that holds huge potential for driving real growth and alleviating poverty.

Last year, the sector generated Sh1.65 billion for the Government in revenues. This is meagre compared to global standards. The Mining ministry’s target is to have the sector contribute at least 10 per cent to GDP, and generate Sh700 billion in Government revenues by 2030.

With a deficit of Sh690 billion in the 2016-17 Budget, the projected growth of mining sector revenues will come as a blessing to the economy, helping reduce Government borrowing.

The big question that then arises is how will we grow the extractives sector so it realises its full potential?

Professional training

The answer lies in capacity building through professional training that is modelled on global standards.

It all begins in our schools.

There has been too much focus on social sciences at the expense of technical skills. Luckily, we have a progressive education sector, and Dinah Mwinzi, the principal secretary in charge of vocational and technical training (TVET), has the wherewithal to formulate policies and develop a curriculum aimed at promoting the acquisition of technical skills.

This will lower the importation of skilled workers, and help us find solutions to the ugly scenes witnessed in Duka Moja in Narok where youths attacked SGR construction workers over claims of being denied jobs.

The lack of local skills is a major challenge in the region as we gear up to exploit new-found resources. This lack of skills is made worse by the slow pace of investment in technical and technology-based institutions.

Unfortunately, the demand for admission to universities has outpaced that to TVETs. This has compounded the skills gap problem, denying Kenyans an opportunity to work on multi-skilled, lucrative infrastructure projects. Instead, they are confined to menial labour that earns them meagre salaries and wages.

But all is not lost. There is need and goodwill for partnership between the Government and private sector to set up centres of excellence that will focus on training locals to avoid over-reliance on foreign expatriates. This will cut down on related costs paid to foreign skilled workers, which is a leakage to the circular flow of our economy’s income.

Foreign companies offering scholarships to Kenyans to travel abroad for capacity building programmes and apprenticeships is a step in the right direction. Additionally, the establishment of local private institutes, such as the Australia Africa Energy and Minerals Institute (AAEMI), offering tailor-made courses and training in mining and energy will help bridge the skills gap.

With courses and trainings benchmarked on global standards, private institutions are able to invest in demand-driven training to equip locals with the desired skills.

Market imperfections

This is the best time to invest in capacity building, when the industry is still incipient. It will create a reliable syntax for those who have general professional skills to acquire relevant skills.

AAEMI, for instance, offers introductory programmes in finance, occupational health and safety, economics, audit, risk, petroleum engineering and exploration, drilling engineering and certification, and mineral exploration.

Capacity building will help reduce labour market imperfections created by the skills gap, thus building a pool of local expertise that will enhance sustainable growth of the sector.

By doing this, Kenya will become the ‘collecting point’ and ‘value-addition centre’ for the region as a mineral hub — just as we are the regional financial and technology hub.

Mr Kuria is an extractives trainer and managing director for Accelerate to Excellence Consulting based in Australia. Mr Ayieko is an economist and consultant.

[email protected];

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