Kituyi warns Turkana oil dispute scaring away investors


United Nations Conference on Trade and Development (UNCTAD) secretary-general Dr Mukhisa Kituyi. Photo/FILE

The current standoff between Tullow Oil and residents of Turkana is an ominous sign for foreign investors, United Nations Conference on Trade and Development secretary-general Mukhisa Kituyi has cautioned.

The UN agency chief said that the dispute and other on-going tussles over county boundaries and resources could hamper foreign direct investments (FDI).

He told MPs disputes and inconsistent laws in the counties were making the country unattractive to foreign investors.

Dr Kituyi, who was speaking to parliamentarians at County Hall in Nairobi Thursday, said that the ongoing rhetoric was diverting national debate away from important trade issues meant to boost the economy.

The former Trade minister disclosed that the government had contracted UNCTAD to conduct a research on investment policies over the past two decades.

“We cannot be operationalising devolution and take our eyes off the collective agenda of developing the country’s economy,” said Dr Kituyi, who is two months into his new job in Geneva, Switzerland.

“I do not oppose devolution but the national and county governments should agree on predictable and comparable laws on ownership and right of access to resources. Having this in place will attract foreign investors to our counties,” he said.

Dr Kituyi singled out the stalemate in Turkana that has grounded Tullow Oil’s prospecting activities as one scenario that could just be the beginning of more crises if proper laws on resource management are not enacted.

READ: Tullow Oil’s woes grow as MPs call for suspension

He decried the fact that the “obsession with county resource distribution” was happening at a time Kenya is losing ground to its regional neighbours in terms of the FDI.

A report released this year by ActionAid and Tax Justice Network placed Kenya third among the three largest economies in East Africa in terms of the FDI inflows in the five years to 2010. Uganda has the highest average at $766 million followed by Tanzania which had $654 million while Kenya had only $210 million.

Dr Kituyi’s visit comes at a time when various county leaders are not only fighting over boundaries but also the revenue distribution for shared resources in two or more jurisdictions.

Recently, an Isiolo County official alleged that Meru and other neighbouring counties had encroached on its land sparking a border dispute among the counties.