This is what we are doing to avoid resource curse

Petroleum and Mining Cabinet Secretary John Munyes (centre), addresses the press in Eldoret. [File, Standard]

The biggest challenge that faces any oil-producing country is how to efficiently use its oil wealth for the greater good of its people. 

There is a general consensus that a natural resource endowment does assist nations to reverse their capital gaps through the generation of revenues for their governments for the delivery of public goods and also to bail their populaces out of poverty.

Author Perry Anderson in his article "Scurrying Towards Bethlehem,” said blood may be thicker than water, but oil is thicker than both. This statement surmises the pros and cons of investing in the oil and gas industry.

Extractive industries worldwide offer huge opportunities for governments to generate readily available revenue for sustained economic growth. While this assertion is correct, countries that are blessed with these natural resources face enormous difficulties in optimising their full socio-economic benefits.

No one can doubt the strategic significance that oil will have in shaping our economy in the coming years. President Kenyatta explained during the flagging off of the Early Oil Pilot Scheme (EOPS) when he said: "The Government will ensure that the local communities benefit from the oil and that the fruits of the resource are also shared in an equitable and sustainable manner.”

It is this ideological position espoused by the President that will guide the ministry in ensuring that oil becomes a good servant, not a bad master, to current and future generations.

It goes without saying that EOPS has spurred huge exploration interest from foreign firms keen to tap into the opportunities afforded. International buyers are also attracted to the quality of Kenyan crude oil due to its low sulphur content and density. The first batch of 200,000 barrels was purchased by Chemchina, a Chinese company, at USD12 million (Sh1.2 billion).

As a ministry, we are keen to ensure we develop technical and human capacity for all our relevant institutions in the oil value chain. Given the magnitude of the anticipated challenges, we remain keen to develop and implement robust mechanisms and policies that will ensure efficient use of oil revenue for sustained economic growth. To achieve that, I will personally champion a proactive partnership and respectful working relationship with our partners and local communities. 

The Government has already gazetted at the Turkana Grievance Management Committee which is expected to deal with any arising community concerns. The pillars of this committee will be founded on transparency, public interest, value for money and equity.

Underlying issues related to revenue sharing, jobs, local content and transparency, and accountability will be resolved through consultation and dialogue. We have no choice but to build citizen confidence and trust in the governance of this precious resource.

In the management of oil revenues, county government officials should have the interest of the community at heart. The full consequences and depth of improper use of these funds will not only amount to a moral and ethical failure by the leadership but will usher unnecessary forces of combustible local politics.

I mean not to be apocalyptic, but we must ensure the leadership we elect in high offices at the county level are men and women of integrity. Of particular importance will be the need to create strong local county institutions that propagate coherent and sustainable practices of managing the revenue that will be realised from the oil sale.

Despite the gains we have made, we are not sitting on our laurels; the Government is investing hugely in infrastructure development. The 2020 plan for a pipeline connecting Lokichar-Lamu are on track.

We cannot run away from the reality of the environmental concerns that come with oil exploration. Together with our partners, we are strictly abiding with the country’s environmental laws and regulatory frameworks and by extension policies espoused on environmental management to ensure sustainable exploration. Working with communities around the exploration area, we are keen to properly manage the flora and fauna while at the same time ensure pollution control regulations and environmental guidelines and standards are strictly followed.

Under my leadership, the ministry will ensure the legacy of oil failure that has dogged oil-producing countries in the continent has no place in this country. From exploration and production, revenue management, developing local companies in the supply chain, technology transfer to licensing, we will ensure we have policies to develop the oil and gas industry in the national interest.

Mr Munyes is Petroleum and Mining Cabinet Secretary.