Uganda has enacted several pieces of legislation to reinforce extractive sector governance.

Last year, Kenya reached a major milestone after the Mining Act 2016 was signed into law, replacing the Mining Act Cap 306 of 1940.

Although the experience from the previous wave of state-ownership in sub-Saharan Africa was less than positive, the desire to capture some of the opportunities brought by the present high price of commodities is powerful and is underpinned by the belief that states are better prepared to actively participate in their mining sector than before.

But by relying on ready cash from oil and mineral extraction, African countries risk squandering their chance to maximise on returns and invest in the continent’s future.

Unfortunately, governments can only move from being bystanders to active players in the industry when they have the expertise that understands what is going on.

TAX HAVENS

The AAEMI has demonstrated this after training staff of East Africa Portland Cement Company and KenGen (Kenya) and Barrick Gold (Tanzania).

The EAPCC increased kiln availability and supply circle time, saving $2 million, while Barrick Gold saved $4.5 million on logistics after the training.

African countries have a big problem. Mining is mostly done by multinationals, which move profits to tax havens. Kenya will need to follow data. Such information is vital to detect tax abuse and hold companies to account.

The public also needs details of these firms’ finances, the taxes they paid, profits made and number of people they employ.

COAL MINING

If a Peruvian coal mining subsidiary of a multinational claims it suffered losses, while its subsidiaries in the tax havens of Bermuda and Switzerland are making profits, it is time to ask questions.

But if you don’t know about the Bermudan and Swiss operations, you have no hope of assessing the payments in Peru.

When suspicious patterns are there for all to see, the chances of powerful people doing the right thing are higher.

That is why we advocate training as a starting point to help track operations in the extractive industry.

Keynote speakers at a mining conference held earlier this week in Nairobi attended by delegates from across the world, spoke of the need for a well-anchored and governed extractive industry that effectively deploys resource rents while addressing safety, health and overall environmental and social issues.

Mr Kuria is the chairman the Kenya-Australian Chamber of Commerce and CEO, Australian Africa Energy & Mineral Institute.[email protected]

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