Kenya on Friday urged the East African region to enhance their gains from natural resource incomes through capacity building.
Julius Muia, principal secretary of Kenya’s National Treasury, told a regional forum in Nairobi that natural resources are finite, and the region must ensure it fully utilizes the potential benefits accruing from a one-time endowment from the onset.
“Capacity building in the extractive industry is very important because it empowers professionals in the region to better understand the processes of removing metals and aggregates from the earth such as oil and gas, mining, dredging and quarrying,” Muia said during the launch of the extractive industries seminar.
From Aug. 2 to 3, the East African Development Bank will host senior government officials from across East Africa to a workshop that will offer capacity building in better negotiating contracts pertaining to natural resource management in the extractive industries.
The two-day event will also provide a networking forum, and an opportunity for East African senior officials to exchange views and share experiences on the subjects of the seminar and related matters.
Muia said that well drafted and carefully negotiated mining exploration and development agreements are key to ensure that East Africa’s natural resource wealth promotes socio-economic development.
He noted that the region is well endowed in natural resources and as national governments attract foreign investors to explore and develop the mining sector, the natural resources must benefit all citizens.
According to the government official, the mining sector contributes to less than one percent of the gross domestic product (GDP) in Kenya, less than two percent in Uganda and three percent in Rwanda while in Tanzania the sector contributes approximately five percent.
He observed that East Africa is keen to avoid the resource curse, where dependence on exports of one commodity, or natural resource, causes the exchange rate to appreciate and thus renders the rest of an economy’s exports uncompetitive.
Robert Kasande, permanent secretary in Uganda’s Ministry of Energy and Mineral Development said that while East Africa is blessed with abundant resources, its population is also increasing hence the need to use the resources optimally.
Kasande urged the region to ensure that a sensible framework is in place to prevent the resource curse and ensure that natural resources deliver socioeconomic development.
He noted that well drafted contracts between the exploration and mining companies and national governments are critical in ensuring that citizens get their rightful share from the exploitation of natural resources.