Key Highlights

1.As Africa’s geostrategic nation of Kenya heads for the General Elections on 9th August 2022, the manifestos of the two leading coalitions, Kenya Kwanza Coalition and Azimio la Umoja One Kenya Coalition, have attracted immense attention and scrutiny.

2.A manifesto is a creed of manifest promises, especially of a political nature. Depending on the stakes accompanying the mood during political regime transitions, a manifesto may be revolutionary if not incremental and progressive.

3.Energy and extractives are intertwined in a complex web, making a transformation map for any country keen on industrialisation and overall global competitiveness.

4.Recognising the urgency to strategically position the Energy and Extractives Sector in the agenda and programmes of the next government, the Association for Women in Energy and Extractives in Kenya (AWEIK) held a high-level policy dialogue in Nairobi on 28^th July 2022 on the theme: The Future of Kenya’s Energy and Extractives Sector: Unpacking the Azimio La Umoja and Kenya Kwanza Political Manifestos. The aim was to unpack the manifestos and evaluate how they have addressed this key sector. The participants represented the youth, the Office of the Deputy President, AWEIK, academia, Base Titanium Ltd, the Institute of Economic Affairs, Kenya Private Sector Alliance (KEPSA), the Kenya Chamber of Mines, Mineral Rights Board, Triple OK Law, and various advocacy and private sector groups.

5.The comparative analysis presented at the meeting established that both manifestos have recognised the urgency for an economic transformation or revolution although they scored from weak to moderate on the comprehensiveness and clarity of their delivery and sustainability plans, the energy and extractives sector being one of the casualties of this sub-optimal performance. The Azimio Manifesto has, however, given the mining industry a stand-alone attention under section 2.2.7.

6.Each manifesto has scripted a distinct curve of conviction about what needs to be done with urgency to transform Kenya’s development trajectory. How to maximise the area under the curve to deliver timely and tangible outcomes to citizens remains a thorny question confronting the promoters.

The Compelling Urgency

Energy security is a key pillar of socio-economic transformation in a world experiencing rising living standards with increasing consumption of products of minerals, industrialisation, and accelerated post-pandemic digital transformation. As such, clean and affordable energy must be a principal focus of any progressive political agenda.

The mineral resource statistics on Africa position the continent as a conducive environment offering cheap labour and attractive profit margins to investors. On 5^th February 2019, on this very platform, an article on digitalisation prospects for the mining sector in Africa described it as “a sector captive of its own ambitions and ambivalence”. To date, this description rings true as key issues of governance in the sector remain outstanding challenges in many countries, Kenya being a case in point. Mineral and energy resources have been at the centre of geopolitical discourse and the political storms and wars that follow radical contestations. Political goodwill is critical to realising the full potential of natural resource endowments and sharing benefits equitably. It is, therefore, compelling to give political manifestos a keen relook at the critical juncture of a political regime change. This is the present case in Kenya as citizens go to vote on 9^th August 2022.

Key Questions for the High-Level Policy Dialogue

The Association for Women in Energy and Extractives in Kenya (AWEIK) provides women with opportunities for equitable professional and economic development within Kenya’s extractives industry. AWEIK held a multistakeholder meeting in Nairobi on 28^th July 2022. The meeting was a high-level policy dialogue to discuss and unpack the key political manifestos and how they have addressed Kenya’s Energy and Extractives sector. Focus was on the Azimio and Kenya Kwanza manifestos, being the leading coalitions as Kenya heads for the General Elections on 9^th August 2022. The theme was The Future of Kenya’s Energy and Extractives Sector: Unpacking the Azimio La Umoja and Kenya Kwanza Political Manifestos. The selected participants represented academia, the business community, media, advisors of political parties and presidential candidates, advocacy groups, professional bodies, government, and many more. Taita Taveta University (TTU) and Jomo Kenyatta University of Agriculture and Technology (JKUAT) were represented by academic staff and alumni. The alumni are currently mentees of AWEIK, most of them graduates of courses in mining and geology. Base Titanium Ltd was represented by the External Affairs Manager.

The key questions the speakers, panel and delegates addressed were:

1. How can the future government be proactive in championing for greater benefits for communities from minerals?
2. How have the manifestos addressed the energy and extractives sector and how actionable, effective and strategic are the measures articulated?
3. What policy and technology issues need to be given priority to transform outcomes in the sectors?
4. Is Kenya ready for a just energy transition? If so, how? How have the manifestos addressed this?

Key Sector Statistics

Despite performing better in terms of the renewable energy share, Kenya’s present total installed power capacity of barely 3 GW fades in comparison to South Africa’s (38 GW), Nigeria’s (13 GW), and the European industrial giants such as Germany (more than 200 GW). On mining sector performance in terms of its contribution to the GDP from 2015 to 2019, the contribution of mining and quarrying has remained below 1% ever since – but the failure to account for some categories of extracted materials and artisanal activities in the GDP matrix explains part of the low share as reported. Fluorspar mining has ceased after propelling Kenya among top producers for years but there are promising prospects for gains from other minerals spread across Kenya, such as niobium, manganese, iron ore, gold, copper, rare earths, wollastonite, various industrial and construction minerals, among others.

Large-scale mining, the capital-intensive face of mining which Base Titanium Ltd has so far represented quite well through the strategic titanium ores, has been attracting more of foreign than local investors in Kenya. As recently reported from research findings by Barreto et al. (2018), the artisanal and small-scale mining (ASM) sub-sector, however, contributes to more employment in Kenya than the large-scale mining and supports the livelihoods of an estimated one million Kenyans. ASM also claims about 60% of the gemstones mined in Kenya. In Taita Taveta alone, the research found that about 10,000 miners were engaged in the extractive and processing sector, with an estimated value of 120 million USD. The Government has set up the Voi Gemstone Value Addition Centre as a mining flagship project towards generating 3 billion KES annually from value addition to precious stones.

The Manifestos: An Overview

An in-depth comparative analysis of the two manifestos set the pace of the high-level policy dialogue, but not before exploring the etymology of the word “manifesto”. What is a manifesto? The word traces its origin to Latin (from manifestum/manifestus – meaning clear, manifest, evident, or conspicuous). Manifesto is also associated with Italian, with the first recorded usage in English in 1620. As such, one may still regard it as a loanword from Italian. Being a published declaration of intentions usually used by politicians to win support, a manifesto can be defined as a creed of manifest promises, especially of a political nature. The zeitgeist that captures a political transition moment influences the tone of a manifesto – to be either revolutionary or incremental and progressive. The critical transition moment in Kenya, following the constitutional term limit of President Uhuru Kenyatta, has arguably influenced the drafters of the political manifestos to engage a revolutionary tone.

The review contextualised the issues within the broader global agenda and megatrends shaping the 21^st century's energy and extractives sector. To show the complex interrelationships on a global scale, a customised transformation map based on strategic intelligence from the World Economic Forum was curated and shared with the audience. The evident interconnectedness of the sector issues with changes in political regimes calls for sound governance which is not inward-looking but systemic and global in perspective. The map shows that hydrogen geopolitics, for example, has important connections with geo-economics, peace and resilience, and trade and investment – a key point that any manifesto promising hydrogen as a source of power should take notice of.

The meeting appreciated that a holistic understanding of the extractives sector is critical, which goes beyond land-based minerals to encompass resources extracted from water bodies/blue economy and other raw materials from the land, such as timber. For example, a visit to the GEOMAR Helmholtz Centre for Ocean Research Kiel, Germany, provides enough proof that deep-sea exploration for minerals is an exciting new frontier for the future of the extractives industry. For the bigger picture, the review threw the spotlight on the key issues of legislation, labour, human rights, transparency in the extractives sector (hence EITI – Extractive Industries Transparency Initiative as a global standard for good governance in the oil, gas and mineral resources sector), and the future of both the energy and extractives sector in the face of digital transformation.

The review also accorded due tribute to the evolution in economic thinking that has been shaping progressive decisions on the role of knowledge, skills and technology in socio-economic transformation. The delegates agreed that the new government must rank human capital, education, training and research among the top priorities if transformative gains in the sector are to be realised.

Comparative Analysis of the Manifestos

Both manifestos have recognised the urgency for an economic transformation or revolution although they scored from weak to moderate on the comprehensiveness and clarity of their delivery and sustainability plans.

On energy, both manifestos have a plan for a legal framework meant to anchor a fuel stabilisation fund and encourage the uptake of green energy, geothermal energy and off-grid solutions cited as key examples. The transport sector has received emphasis as a key avenue for energy transition. Apart from citing the allocation of funds and regulatory mechanisms, strategic measures for achieving and sustaining the ambitious energy sector goals remain weak or sub-optimal in both manifestos. Compelling and effective strategies for achieving a just energy transition is a tough challenge that remains unresolved in the contents of the public manifestos.

The Azimio Manifesto, to its credit, has given the mining industry a stand-alone attention under section 2.2.7. It notes the important role of minerals and metals in the present and future of modern society. The manifesto highlights the need for awareness creation on the sector’s importance and enhancing mining surveys for data-and-evidence-driven decision support, deploying data analytics and Artificial Intelligence (AI) in the process.

The manifesto promises to boost the local glass industry by utilising locally available industrial minerals. Steel manufacturing has been cited as an industry that can help create jobs with an active role of public-private partnerships. The substantial environmental impacts of steel manufacturing, however, invoke curiosity about emission-reduction measures as climate change commitments become urgent in Nationally Determined Contributions (NDC). The 27^th UN Climate Change Conference of Parties (COP27) will this year be held in Africa, and it is important for Kenya to anticipate answers that demonstrate feasible commitments.

The Azimio Manifesto focuses on the energy sector under section 2.3.4 – positioning energy as a pillar of economic revolution. Besides increasing onshore and offshore oil and gas exploration, it proposes to establish a Strategic Petroleum and Gas Reserves to mitigate oil and gas market supply disruptions and improve emergency preparedness through a robust oil and gas reserve policy. Catering for the welfare of women and their households by offering clean cooking options by 2030 stands out in this section, further promising to lower the cost of energy for MSMEs. The manifesto has committed to commence grid hydrogen investments as a source of power for both domestic use and export, a new idea that would easily be considered to belong to the future of energy and energy geopolitics. The manifesto singles out the need to address Kenya’s long-standing problem of electricity transmission losses from the grid, which at about 20% is double the recommended threshold of 10%.

Governance aspects in the mining sector have been highlighted while appreciating the critical role of technology. The manifesto lists public participation, institutional strengthening, administrative capacity development, transparency, policy enforcement, and technologically enabled compliance monitoring. The need to ensure technology transfer has also been recognised. The Azimio Manifesto also acknowledges the large market size of the Eastern African bloc, with a population of more than 400 million, as a huge opportunity to tap into through collaborative win-win engagements. The review also evaluated the Azimio Manifesto’s mantra of “One County, One Product” as an interesting attempt at reaping from the comparative advantages of the country’s rich diversity resident in devolved units (Ricardian economics).

Unlike Azimio, Kenya Kwanza has not given the extractives sector a stand-alone section in its manifesto. The manifesto promotes a “bottom-up” economic model as a way of benefitting the majority, who are at the bottom of the economic pyramid, as opposed to a trickle-down model. It uses a graphic illustration that compares the cost of 40 million KES required to produce one job in a firearm factory to the 280,000 KES required to produce one job in a garment factory, in Kenya. The manifesto also introduces “State Capture” as a corruption syndrome that must be terminated.

The extractives sector’s issues are either mentioned or implied within other sections e.g., economic transformation (p. 10), petroleum pricing and transition to clean alternatives through tax incentives and the “Hustler Fund to develop the nascent EV motorcycle assembly industry” (p. 31), and how beneficiary counties and communities, as part of strengthening devolution, can benefit from the funds they are entitled to under the Mining Act of 2016 and the Petroleum Act of 2019 within six months (p. 61).

The Kenya Kwanza Manifesto, to its credit, has articulated in detail the energy sector issues under section III (Infrastructure), complete with proposals for consumer protection and tax incentives while promoting e-mobility as a clean transport mechanism for the masses. A storage facility for Liquefied Natural Gas (LNG) in Mombasa has been proposed as a clean substitute for heavy fuel oil and a step in the direction of meeting the national emission-reduction commitments. On electricity, it promises to delink government development initiatives, leaving Kenya Power to operate on commercial principles.

Quarterly financial and operational performance reports by the national energy regulator have been put forward as a measure of enforcing transparency and public accountability in the electricity sub-sector. The Kenya Kwanza Manifesto has also recognised the need to increase the capacity for geothermal energy generation, a renewable source that promises a lower unit cost of production than the other sources in the long run. The manifesto proposes to upgrade the ageing electricity transmission and distribution network as an expensive yet necessary undertaking towards reducing the cost of power in Kenya.

Kenya Kwanza is also keen on scaling up clean cooking technologies and is heavy on addressing the charcoal value chain: It promises to decriminalise charcoal trade to exterminate the bribes that are estimated to account for 20-30% of the final price, modernise and commercialise the charcoal value chain, and to help adopt modern kilns. It will also promote youth-owned and youth-operated briquetting enterprises by utilising commercially viable quantities of agricultural waste from coffee, rice husks, maize cobs, coconut husks, among others.

Summative Evaluation

Overall, each manifesto has scripted a distinct curve of conviction about what needs to be done with urgency to transform Kenya’s development trajectory. How to maximise the area under the curve to deliver tangible outcomes to citizens, within the term of the new government, remains an outstanding question that both manifestos need to address convincingly and effectively. The manifestos are also more pronounced on the upstream than downstream side of the sectors, yet the downstream side has many urgent and outstanding economic, policy and technology issues to be resolved.

The Azimio Manifesto is pronounced on pursuing an “economic revolution” with frequent references to fighting corruption while upholding social justice and exercising national values and ethos. It also emphasises “economic diplomacy” and the critical role of advanced knowledge and technology in achieving the set transformational agenda. On the extent to which it has addressed the energy and extractives sector, the Azimio Manifesto appealed as a moderate attempt that can be made better by providing more details on strategic delivery and sustainability plans.

The Kenya Kwanza Manifesto is pronounced on denouncing “State Capture” and the rising national debt burden while promoting a “bottom-up” model as a favoured substitute for trickle-down economics – introducing a compelling change it christens the “perfect storm”. From the way the bottom-up economic model has been explained, the manifesto points to the bottom of the labour demographics pyramid as the critical intervention point for maximum returns on investment, job creation for the masses at the bottom being the key result area. On the extent to which it has addressed the energy and extractives sector, the Kenya Kwanza Manifesto appealed as a piece that still needed much more clarity for the reader to grasp the fullness and feasibility of the promises therein, especially on the extractives sector.

Panel Discussion and Plenary

A panel discussion and plenary followed the in-depth manifesto review. The aim was to address the prime question on how to strategically position the key issues and interests of the energy and extractives sector in the new government. The participants represented the youth, the Office of the Deputy President, AWEIK, academia, Base Titanium Ltd, the Institute of Economic Affairs, Kenya Private Sector Alliance (KEPSA), the Kenya Chamber of Mines, Mineral Rights Board, Triple OK Law, and various advocacy and private sector groups.

The following key observations emerged from the panel discussion and plenary:

1.The visibility of the extractives sector is still wanting and needs to be enhanced intentionally through well-targeted awareness creation, networking, training, and consistent advocacy. The key stakeholders must innovatively upscale their participation model to be heard and heeded in the new government.

2.Institutionalising predictability in the energy and extractives sector is a critical requirement for the sector to thrive, especially in terms of investments, governance of relevant human rights, and operational efficiency. There is, therefore, an urgent need for a transparent legal, policy and regulatory regime that is in sync with modern technology and does justice to all stakeholder interests.

3.The key or flagship projects originally envisioned for the mining sector seem to be losing momentum and need to be reinvigorated in the new government. They include gem value addition in Voi, digital cadastre for online mineral rights management, a current database from airborne geophysical survey, and the National Mining Institute that was supposed to synergise the ongoing efforts to build capacity for the mining sector which is already evident at the Kenyan-German Centre of Excellence for Mining, Environmental Engineering and Resource Management (CEMEREM), hosted at Taita Taveta University (TTU). 

4.Foreign investors will still be relevant in Kenya’s large-scale mining landscape, being a capital-intensive venture. As such, the dilemma on local content should be handled pragmatically in an incremental and progressive manner.

5.Economic decision-making on erecting capital-intensive projects or processing plants without international partnerships should be weighed on a balance of scales pegged on resource abundance and feasibility informed by factors beyond national borders e.g., geopolitics. Using the example of an oil refinery, the abundance and sustainability of the local reserve shows that Kenya is not an oil-rich country by international standards, making a local refinery an uneconomical venture.

6.The current moratorium on issuing licenses for mining projects needs to be lifted urgently.

7.Benefits sharing with local communities in the extractives sector still faces bottlenecks that should be addressed urgently using verifiable criteria and robust formulae.

Key Implications for Sector Stakeholders and Recommendations

Energy and extractives have inseparable interconnectedness, interdependencies, interactions, and interrelationships, which demand sound governance. Stakeholders in energy and extractives are challenged to work in a united front and more aggressively to enhance the visibility of the sector and influence policy direction.

Industry and academia have a key role to play in collaborative awareness creation and training to meet the emerging trends of energy-intensive and mineral-driven socio-economic transformation. Advocacy groups have a critical role in ensuring active representation and anchoring the sector issues into the key agenda and line-ups of current and subsequent political regimes, governance being an important sphere of influence. Good governance rests on political goodwill and determines the success of the investment climate, a major feature in sector performance.

Benefits sharing with local communities in the extractives sector and predictability in the governance framework of both the energy and extractives sector should be enhanced through active stakeholder engagement in revising the relevant resource-accounting formulae, legislations, policies, and regulations.

The new government taking over after the August elections is hereby petitioned to give priority to addressing the key energy and extractives sector issues, particularly:

1. Active sector representation through merited appointive positions and allocative justice;

2.An investor-friendly regime, cost stabilisation for affordable and clean energy, and consumer protection in a predictable policy and regulatory environment;

3.increased support for sector-focused capacity development including research and development funding (R&D);

4.Gender-aware and investor-friendly policy formulation; and

6.Institutional strengthening and conducive restructuring to build on the momentum that gave the mining, oil and gas sector a policy boost from 2013, hence enhanced attention to the flagships such as the Voi Gemstone Value Addition Centre and National Mining Institute.

By Nashon Adero

Nashon Adero, is a lecturer in the Department of Mining and Mineral Processing Engineering at Taita Taveta University (TTU) and a former policy analyst at the Kenya Institute for Public Policy Research and Analysis (KIPPRA). He received assistance in the manifesto review exercise from the following young graduates and mentees: From the Association for Women in Energy and Extractives in Kenya (AWEIK) were Imelda Nasubo (mining engineer, also IBD mentee), Jill Munyes (mining engineer), and Rose Muchangi (geologist). From Impact Borderless Digital (IBD) and ESIPPS Africa (Nairobi) were Beda Ogola (statistician) and Wilson Kibe (environmental planner).