Najib Balala, tapped to head the mining docket, faces a raft of challenges in trying to juggle between ensuring maximum returns from the under-exploited industry while avoiding flight of investors through punitive policy measures.
By creating a special stand-alone ministry for the sector, President Uhuru Kenyatta has indicated that mining will be one of the main income earners for the government amid huge budgetary pressure to implement key programmes such as devolution.
The sector has been ignored over the years despite its huge potential. Kenya has recently struck substantial reserves of valuable minerals such as gold, niobium and rare earth which are expected to earn the country foreign income.
“We see Kenya as having a huge potential in mining and the sector has for far too long not been given adequate attention,” the President said Thursday.
The sector lacks the appropriate laws and policies to manage the sector with mining firms paying pittance in royalties. Kenya presently relies on the Mining Act of 1940 which has only been revised twice in 1972 and 1987 but with little input on contemporary practices in the sector such as fair sharing of revenue.
This is likely to change following the creation of the special mining ministry which would look at areas such as bigger ownership of mining ventures by Kenya as well as review of royalties paid by exploration firms. A new Mining Bill may enacted soon.
Mr Balala said Thursday he intends to woo fresh investments to the sector if confirmed to the head the docket.
Mr Balala, 46, is a former minister for Tourism and MP for Mvita in Mombasa County.
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