Vulnerable Populations in Emergencies July 1- 31, 2015
ISSUE 110
A monthly newspaper by the Media Diversity Centre, a project of African Woman and Child Feature Service
Too soon to celebrate natural wealth, experts say
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By Joyce Chimbi
t is estimated that the Kenyan population is growing at an estimated one million people per year. As the number of people continues to grow, the government is now finding itself at a cross roads, unable to raise enough resources to cater for the needs of those newly born while also keeping the rest of the population healthy. With social amenities already stretched thin, it was clear during the recent budget reading that the government is becoming aggressive in raising domestic revenue in order to attain sustainable human development. The budget, the highest in the history of the country at 2.1 trillion, means that the government is looking for ways to raise the much needed revenue with experts now saying that the extractive industry presents one of the most promising sources of revenue. Against that backdrop, recent discoveries of sizable natural gas reserves and barrels of oil in the country has economists hopeful that Kenya can now boost and diversify its economy that has largely been dependant on agriculture. But environmentalists and climate change experts in favor of renewable energy say that exploration of oil and gas must stop and that newly found oil will remain underground dashing hopes that the extractive sector could become a leading source of revenue.
Cattle grazing freely in a rural set up. They are a major sour of wealth among the dairy farmers and According to Hadley Becha, pastoralists. Experts predict that Kenya’s economy, that has been dependent on agriculture and tourism, will director of local nongovernmensoon benefit from discovery of coal, oil and gas in parts of the country. Photo: AWC Correspondent. tal organization, Community Action for Nature Conservation says: Becha says that oil and gas in Kerican countries, an EIA for a petrol technology in clean energy. Solar “environmentalists must take into ac- station can also be used for oil explo- energy technology has remained too nya is controlled by the archaic Petrocount that economic policies are not ration,” he says. expensive for many African coun- leum Act of 1984, which was briefly driven by environmental concerns.” updated in 2012. But executive director of Green tries.” Danson Mwangangi, an Economist Africa Foundation, John Kioli, says And policy experts concur saying Kioli says that while Africa is comand market researcher in East Africa that Kenya is looking into technol- mitted to climate change mitigation that the old laws must be comprehentakes issue with the building momen- ogy with fewer emissions adding that: and adaptation efforts “the continent sively updated. “The Petroleum Act tum “to demonise fossil fuel at a time “coal will be mined underground as lacks the necessary resources. Africa 1984 is a weak law, especially in benwhen Africa is discovering billions of opposed to open mining.” cannot continue looking to the East or efits sharing and is also silent on the oil barrels and natural gas reserves.” management of gas,” he says. Kioli says that the discussion goes West indefinitely for these resources.” Mwangangi says: “global voices in beyond environmental concerns to But even as Africa is adamant that He also says that these resources favor of clean energy should not be global trade and particularly who has are given to Africa through double ac- oil and gas exploration will continue, seen to punish African countries such power over who. He says that while counting where Official Development Becha says the gains will be short-term as Kenya. These countries must be Africa continues to use clean energy, Assistance (ODA) is also reported as and unlikely to revive the economy. given a window within which they can they have not been sufficiently com- funding for climate change adapta“With oil and gas, it is not just exploit their natural wealth and engi- pensated for low emissions. about licensing, there are also issues of tion and mitigation projects. neer significant economic take off.” The Kenyan government esti- taxation and a lot of revenue that goes “The debate must recognise the “Discussions should be around geopolitics of climate change. Where- mates that the 2013 -2017 National to the government,” he says. defining this window in terms of as we are keen on cutting emissions, Climate Change Action Plan for In the absence of capital gain tax as years and setting up checks and bal- we know that Africa is responsible for climate adaptation and mitigation is the case with Kenya and many othances to guide exploration at minimal about three percent of global emis- will require a substantial investment er African countries “the government risk to the environment,” he adds. of about US$ 12.76 Billion. This is will lose a lot of revenue to briefcase sions,” he says. Now environmental experts are Other experts say that the Demo- equivalent to the country’s 2013- exploration companies who act as expressing concern that Kenya lacks cratic Republic of Congo (DRC) has 2014 national budget. middlemen robbing national governthe capacity to exploit oil and gas at the second largest forest cover in the As Kenya, like other African coun- ments off significant revenue.” minimal risk to the environment. Capital gains are the profits that world but is yet to receive any com- tries, continues to face the crippling Unlike Egypt, which has specific pensation from Reducing Emissions effects of drastic climate changes to an investor realizes when he or she guidelines on Environmental Impact from Deforestation and Forest Deg- the economy and peoples livelihoods, sells the capital asset for a price that Assessment (EIA) for oil and gas, radation (REDD+). is higher than the purchase price. Kioli says that nature has provided. Kenya only has one classification of “We expect to use cheap petro- Ghana is one of the few countries that Nonetheless, REDD+ has commitEIAs, Becha says. leum to catalyse industries, mecha- imposes a capital gains tax. ted to give DRC its first $60 million. He says that oil and gas is a much He also says African countries Others are concerned that the West nise agriculture, boost irrigation, and specialised sector which requires de- is shifting to the kind of energy whose even plant more trees,” he says. will have to establish a solvent fund tailed and specific environmental im- technology they are able to supply. But Kioli, the brains behind the where revenue from oil and gas will pact guidelines. Zillah Mwajuma of the Kenya Oil Climate Change Authority Bill 2012 be stored to stabilize the economy: “There are specific guidelines for and Gas Working Group, that works emphasizes the need to address the “oil can inflate the prices of certain upstream, mainstream and down- towards sustainable development, issue of governance and legislation in commodities hence the need to constream exploration. But in many Af- says: “Africa is yet to benefit from Africa. trol surges in inflation.
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