Untapped business links could boost economy in Kenya

While the mining sector currently contributes less than 1% towards Kenya’s gross domestic product (GDP), the Kenya National Chamber of Commerce and Industry (KNCCI) believes that it has been given an opportunity to contribute more towards the economy with the implementation of new mining laws which replaced historical 1940s legislation that was a hindrance to investors as well as outdated data which has limited interested exploration companies.

This article first appeared in Mining Review Africa Issue 10 2018

Following the review of the former Mining Act, the first major revision in mining law in the country since the 1940s, the Mining Act of 2016, was signed into law by President Uhuru Kenyatta on 6 May 2016 and is largely considered to be a modern piece of legislation which includes more details and provisions about the principles of land policy, public land, regulation of land use and property, environmental obligations and agreements relating to natural resources.

Moreover, the new Mining Act provides clearer definitions regarding community land to enable mining companies and investors to interact better, guided by clear law on displacement, relocation and compensation, says KNCCI CEO, George Kiondo.

“These new laws provide clearer insight into the legal risks and how to tackle them before commencing any mining activity, allowing funders to make informed decisions, with minimal risk,” he adds.

In addition to this, the effort by the government to acquire new data (airborne mineral survey) on Kenya’s mineral potential will help to de-risk exploration in Kenya as well as renew interest by exploration companies, who won’t have to invest large sums of money into early stage mineral investigations, says Kiondo.

The “Big Four” plan

President Uhuru Kenyatta’s “Big Four” economic policy agenda, which was announced in December 2017, provides numerous opportunities for the mining industry, especially with regards to value addition of various minerals found in Kenya to spur growth across multiple sectors.

The mining industry provides key raw materials for at least three of the Kenyan government’s Big Four pillars, which includes manufacturing, universal healthcare, affordable housing, and food security.

By way of example, Kiondo explains that the affordable housing pillar alone will require vast amounts of cement, sand, stones and aesthetic materials for finishes which can be sourced from the country as minerals including limestone, gypsum and marble, besides others.

Meanwhile, the mining industry itself relies on other industries; such as hospitality, logistics, security and construction well as those within the Big Four, to operate. “This means that the existence of a strong mining industry will, in turn, boost other related industries.

The majority of KNCCI’s members are small to medium enterprises in various towns across Kenya that support various mining activities in various ways including the sale of food, equipment such as silting pans for artisanal gold mining, transport services among other services.

Kiondo believes that if you’re part of the Big Four there’s definitely a new impetus to get investment deals done.

KNCCI at a glance

As a not-for-profit, autonomous, private sector institution and business membership organisation, the KNCCI was established in 1965 to promote, co-ordinate and protect commercial and industrial interest in the east African country of Kenya.

The KNCCI was set up as an amalgamation of three Chambers of Commerce that existed at that time of its establishment, namely; the Asian, the African and the European chambers of commerce.

The amalgamation of the chambers created a unified and single voice for private sector, so as to influence public policy, efficient service delivery, as well as facilitating monitoring and evaluation of public sector programmes and projects.

It facilitates local and international trade through various trade delegations and missions as well as business forums and joint business cooperation forums.

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