Because of a lack of expertise, Kenya obviously has to depend of foreign firms to do things such as mining or drilling.

- What measures are in place to ensure that Kenya gets all possible wealth from it's natural resources?

- Are there plans, policies on how the wealth from the natural resources will be handled / spent / divided? - For the good of the nation & to prevent thefts (Prevent the wealth from being stolen)?

- Are there possible risks of Kenya loosing control over it's natural resources? If so, what is in place to avert the risk's fulfillment?

Lessons from Nigeria:

http://mg.co.za/article/2012-11-25-probe-alleges-nigeria-lost-billions-in-oil-revenue

[quote=mkeiyd][quote=D32]Because of a lack of expertise, Kenya obviously has to depend of foreign firms to do things such as mining or drilling.

- What measures are in place to ensure that Kenya gets all possible wealth from it's natural resources?

- Are there plans, policies on how the wealth from the natural resources will be handled / spent / divided? - For the good of the nation & to prevent thefts (Prevent the wealth from being stolen)?

- Are there possible risks of Kenya loosing control over it's natural resources? If so, what is in place to avert the risk's fulfillment?

Lessons from Nigeria:

http://mg.co.za/article/2012-11-25-probe-alleges-nigeria-lost-billions-in-oil-revenue[/quote]
@D32, How much do you think it costs to drill one well?
If Kenyans were asked to contribute towards a natural resources exploration fund,how much of your net worth would you put in?
In short,natural resources exploration is a capital intensive risky affair.
Appreciate that somebody else is willing to burn their fingers.

Having said that, what needs to be done are measures to be in place,for sharing the revenues if the venture bears fruits. that should be the focus, revenue sharing formula.[/quote]

Thank you for your response.

This statement did set the backdrop of the matter.

"Because of a lack of expertise, Kenya obviously has to depend of foreign firms to do things such as mining or drilling"

If the GoK had the technical capacity to drill or mine, it would, but because it does not have the technical capacity, it has to depend on foreign firms, and because foreign firms are in the picture, the questions in this post.

I do not think that foreign firms were involved due to a lack of financial capacity, rather, it was, and still is, due to a lack of technical capacity from the GoK.

I resonate with you that the focus should be on the revenue sharing formula.

[quote=tycho]The problem of technical capacity and the costs that go with it, should be left to free market forces.

What the government should focus on are:

1. To ensure that winning firms offer a comprehensive benefit package to locals.

2. To subject revenue to an open and automated revenue distribution process, and

3. To encourage all citizens to play a supervisory and control roles, on the participating companies.

Once again, ICT saves the day.[/quote]

The current reality is that the GoK does not have the technical capacity to carryout the operations, hence the partnership with foreign firms and hence the questions.

Why would you prefer Kenya NOT to have local technical and financial capacity?

[quote=tycho]On the contrary, I believe this is the best way for Kenya to build her technical, and financial resources. To see this we need to consider the following:

1. We have not yet exhausted finding and naming natural resources.

2. One of the major natural resources are in human capital, and,

3. There is a need to maximize the market performance of Kenya's natural resources in the global market.

These facts imply that:

1.Government should be lean and efficient

2. Government needs to keep away from price distortion in the market

3. Government should be able to play the roles of keeping laws, and directing the citizen without putting itself at a disadvantage of loss or increased costs- policy flexibility.

By following the path outlined in my previous post, and by increasing market connections, and through encouraging entrepreneurship, the government will be increasing our technical and financial capabilities.[/quote]

Good that you are now pro local capacity.

I think that education and training is elementary in building local technical capacity.

Precisely, local technical capacity cannot be realized without education & training.

Yes, the Gov must regulate the standards.

I also believe that the Gov can have a more direct hand in facilitating this specialized education, such as carefully crafting the education in partnership with sourced experts, then introducing it to public universities, rather than wait for private institutions to introduce the course.