Hope this works nice read!By Felix Olick A senator has pub By Felix Olick A senator has published a Bill proposing how Kenya's natural wealth should be shared.
The Bill, sponsored by ODM nominated Senator Agnes Zani, has already been presented to the Senate for first reading and has received government support. It will be brought back to the House next month after more consultations between all interested parties.
If the Bill is passed, Governors from mineral-rich counties, especially Turkana which has oil and Kitui which has coal, will control billions of shillings in revenue.
The proposed Bill has allocated 32 per cent of royalties to the counties where exploitation is taking place, effectively making devolved units with minerals potential economic powerhouses.
According to the The Natural Resources (Benefit Sharing) Bill 2014, 12.8 per cent of royalties and fees will be utilised for local community projects while the rest will be, at the discretion of the Governor, utilised in the entire county.
"Although these are national resources, we want to ensure that the communities which produce these resources benefit most directly because, this way, you will reduce conflicts," said Zani.
According to the Bill, 20 per cent of revenue collected shall be paid into the sovereign wealth fund, while the remaining 80 per cent shall be shared between the National and County governments.
"Eighty per cent of the revenue collected shall, subject to subsection (3), be shared between the National Government and the County Governments in the ratio of sixty per cent to the National Government and forty per cent to the County Government," the Bill says.
"At least forty per cent revenue assigned to the County Governments under subsection (l) (b) shall be assigned to local community projects and sixty per cent of that revenue shall be utilised in the entire county," it adds.
Local community, according to the Bill, refers to a people living in a ward within which a natural resource is situated and are affected by the exploitation of that resource.
The Mining Bill of 2013, contested by some stakeholders, had proposed that 75 per cent of the proceeds would go to the national government, 20 per cent to the counties and 5 per cent to local communities.
The new Bill has proposed the creation of a Natural Resources Benefits Sharing Authority with the powers to determine and review the amount of royalties and fees payable by exploration firms in each sector.
The Authority will also have powers to determine the ratio of sharing revenue where natural resources cut across two or more counties.
Mrima Hill, in the coastal county of Kwale, for example, has one of the top five rare earth deposits in the world. The area also has niobium deposits estimated to be worth $35 billion.
British exploration firm Tullow Oil has also announced the commercial viability of oil in Turkana, making Kenya one of the world's latest hotspots for the black gold.
Other areas with minerals are Migori (gold), Kitui (coal) and Kajiado (limestone and gypsum). However, the Bill will also apply to the exploitation of forest, water, wildlife, natural gas, mineral and fishery resources.
The Kenya Revenue Authority will have powers to collect the royalties imposed by the Natural Resources Benefits Sharing Authority. To increase local participation, companies involved in resource extraction will enter into benefit-sharing agreements with the respective county governments. The agreement also includes non-monetary benefits that may accrue to the county.
Yesterday the Ministry of Mining insisted that Kenya's mining royalties were still competitive and the industry was attractive to investors, despite recent rate reviews by other mineral-rich countries such as Tanzania and Zambia.
Tanzania enforced new royalty rates of 4 per cent gross value of the minerals from 3 per cent net value and scrapped a 15 per cent value added tax relief that mining firms used to enjoy.
Last year, Kenya revised its royalties, with those charged on gold doubled to five per cent, while rare-earth metals, niobium and titanium ores climbed to 10 per cent from three per cent.
"There is a broad range of minerals apart from gemstones and gold. For example, in Kenya, royalties rates charged on raw gemstones remain at five per cent while royalties for value added gemstones have been reduced to one per cent," the Ministry said in a statement.
The Ministry announced that a reformed regulatory framework will lead to reduction of the cost of geological exploration, increase efficiency and transparency in management of mining concessions, reduce bureaucratic red tape in grant of licences, streamline licence application systems and enhance access to information.