Kenya is revising the country’s mining policy to lure more investment.
According to estimates, Kenya’s mining sector has the potential to contribute about 6.4 per cent to the country’s gross domestic product (GDP).
Chief Executive of Kenya’s Chamber of Mines Steven Mwakesi has hailed the current administration for prioritising the sector.
“One thing that has been progressive is the institution of mining bill that seeks to replace the 70 year legislation enacted in 1940,” Mwakesi told CNBC Africa.
He also said Uhuru Kenyatta’s administration created a ministry dedicated to mining which was a positive move. He added this has led to the creation of a policy on mining and minerals.
“That policy has come to the cabinet level and will have to be ratified by parliament so we have a comprehensive policy on mining and minerals. We are at the final stage of approval by parliament and presidential ascent,” said Mwakesi.
“What the bill has done is making what was very archaic licensing and management structure within the sector become more robust, more modest and accommodates new facets in financing in the extractive sector.”
He also welcomed the new regime on royalty distribution saying communities were set to benefit from the new framework.
Mwakesi said the only framework that existed was on how much royalties companies were expected to pay to the government.
“We are creating a framework where communities will be able to harness the amounts being allocated to them. This new law requires companies to come with community social investment plan. The law makes sure the investment is comprehensive not a public relations stunt,” he said.
“There is a clearly stipulated ratio in which royalties are supposed to split which will see 70 per cent going to the national government, 20 per cent to the county government and 10 per cent put back into the community where mining is taking place.”
Mwakesi said the proposed policy was relevant to players at all levels.
“Now we have the law that can play at all levels, both small scale and large scale and there are different fiscal protections given to anyone who decides to invest in the extractive sector.”