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Legislators to establish law on natural resource royalties

16 October 2013, 08:31

Nairobi - Lawmakers plan to come up with laws that will guide on the sharing of revenue accrued from the exploitation of the natural resources in the country.

Senators have formed an ad hoc committee on royalties to draft the Bill on Royalties Accruing from Natural Resources.

The law will propel both local and foreign explorers to remit a particular percentage to the local communities for their social and economic development.

The legislators are expected to table the bill in the house before the end of October after collecting all stakeholders' views and recommendations as required in the Constitution.

"These are laws that will ensure that the locals from the areas where the mineral or the naturals resources are being extracted benefit. Trickling benefits down to the locals is something critical but missing in the current legislations," Agnes Zani, the nominated senator heading the committee, told Xinhua on Tuesday.

Revenues from the mining firms under the country's existing mining regulatory framework is based on royalties and not on profits made.

Although, under the Constitution, the communities are entitled to a five power cent share of the royalties remitted to the government, the new laws could provide the benchmark for revising them upwards.

"We had proposed that at least 19 percent of the revenue collected remains within the local area to benefit the respective communities but we will settle on a percentage agreed upon by the committee," added Zani.

Establishing the new laws specifically targeting on benefitting the locals has been prompted by the recent discoveries of the precious minerals in the country including oil, coal, iron ore, niobium, titanium and rare earths.

For a long time, household poverty has remained high in regions where natural resources such as the game parks and historical sites has attracted huge revenue collections, an instance of Kwale in the coastal region.

"We will have clear sharing formula between the national and county governments and the community. And all the money meant for the community will be channeled to a Consolidated Fund to enable the locals improves their social and economical status. There must be able to benefit collectively,"

The mining industry is currently dominated with exploitation of the non-metallic minerals including soda ash, fluorspar, barite, gypsum, salt, silica sand and Soapstone.

But the new mineral discoveries are set to boost the country's GDP by over 13 percent, according to the Department of Geology and Mines.

- Xinhua


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