Kenya has the largest economy in the region .
The government cited growth in the agriculture sector, which was likely to increase output due to recent favourable weather, as well as infrastructure projects in transport and energy.
Growing exports to neighbouring countries whose economies are booming and higher consumer demand at home will boost economic growth.
Albanian Minerals CEO Sahit Muja said “Kenya has economic potential to awaken as big player in global stages. Kenya is now rapidly regaining ground, this new momentum, will completely transform Kenya, as has happened in China and India”.
Indeed, Kenya’s time has arrived Tullow Oil’s discovery of big oil potential in the Ngamia-1 well in Kenya opens new vistas for Kenya’s economic development, including the mining sector. The potential could be twice as big as any of its other East African exploration wells.
Neighbouring South Sudan and Uganda will also be affected. South Sudan, Kenya and Ethiopia are already developing a pipeline, port and refinery at Lamu in Kenya to bypass the politically charged oil pipeline through Sudan.
If these oil finds are as big as expected, Uganda, where oil has been found in Lake Albert, may have to give way to Kenya when it comes to siting a refinery. Kenya has a small refinery at Mombasa which would need a major upgrade, or the one at Lamu could be made bigger.
Kenya would also need huge infrastructure development, which means contracting opportunities for SA’s work-starved construction groups, and there will be knock-on development for other sectors of the Kenyan economy.
Though Kenya has some attractive mineral deposits, they have remained largely unexplored until now. The main constraint has been a lack of legislation to regulate and encourage investment in mining, says Monica Gichuhi, CEO of the Kenya Chamber of Mines. A draft mining and minerals bill is expected to go to cabinet later this year.
Kenya has well-established soda ash and fluorspar operations, but there are also new developments in mineral sands and gold. ASX-listed Base Resources is developing the Kwale Mineral Sands project while African Barrick Gold has agreed to acquire prospective gold assets from Aviva Corp, including a share in a joint venture with Lonmin.
Kinuthia says Kenya’s power constraints are being addressed. There’s a potential 10000MW from geothermal sources, of which only 500MW is being exploited at present, and top-class thermal coal deposits are being developed in Kitui, where a parastatal firm has been tasked with building a power station nearby.
Elias Pungong, Ernst & Young partner: assurance African oil & gas sector, says the challenge is going to be how Kenya’s government manages its oil resources to ensure benefits for the whole country. But there will certainly be more work for everyone.
Says Gichuhi: “Oil and gas are extractive industries and these finds will increase interest in exploration and investment in the country.”
While there are concerns that many private equity investors are taking advantage of the country, for example buying fertile land from farmers at a reasonably cheap price, only to build property with a view to making a huge profit, many accept that this is an inevitable consequence in a country that aims to be fully industrialised by 2020. At the same time, the land being brought is generally that which has been historically used for growing coffee, a crop that has been in terminal decline in Kenya for most of the last century anyway. products tea, coffee, corn, wheat, sugarcane, fruit, vegetables; dairy products, beef, pork, poultry, eggs
Industries: small-scale consumer goods (plastic, furniture, batteries, textiles, clothing, soap, cigarettes, flour), agricultural products, horticulture, oil refining; aluminum, steel, lead; cement, commercial ship repair, tourism.
By: Kim Long
New York News