Policy shift needed to maximise mineral riches

PHOTO:COURTESY

Projections that Kenya has the potential to earn a whopping Sh300 billion a year from royalties and taxes levied on mineral exports is good news to a country scrambling to borrow money to fund its development projects.

The projected cash inflows would also go a long way in helping the country meet its ballooning debt obligations both locally and globally.

But before we open the champagne bottles, the Government must review some key policies that have been left largely unattended when the country only exported soda ash and fluorspar.

First, the country must align the laws governing minerals’ exploration and mining to global standards.

The only way to do this is for the State to make public the contracts it signs with foreign mining companies, many of which are synonymous with illicit trade that is estimated to cost Africa an estimated $60 billion (Sh61 trillion) a year.

This is more than the capital that the continent receives a year from its so-called development partners in aid, loans and Foreign Direct Investment (FDI).

The proposition that these contracts must be made public is driven by revelations that public lawyers have in the past entered into agreements with foreign investors that have cost Kenyans billions of shillings in compensation claims that are often settled outside the country.

Second, the setting up of four gemstone cutting and value addition centres in different parts of the country is a good start, but the Government must do more to protect and improve the welfare of artisan miners.

This may include passing the necessary legislation setting out the minimum requirements for miners to guard them against unscrupulous employers who send them into mines without any protective gear.

The writer is a consultant on business and economic issues. [email protected]