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Can we pay our Ksh 9tr debt in two years?

A look at reality

THE QUOTE

Wiper Party leader Kalonzo Musyoka now says Kenya will clear all its debts within two years should the One Kenya Alliance (OKA) clinch the country’s presidency.

He went on to add: “Kitui, for example, is full of copper. What we propose to do is use all these untapped natural resources and within two years we will have cleared all our debts.”

BREAKDOWN

The What: Debt currently stands at Ksh 9 trillion

The How: By taking advantage of mineral resources

Specifics: Kitui as a copper-producing zone

THE ASSUMPTION

That Kitui County is sitting on a 400-billion-shilling monthly potential worth of copper.

THE PROBLEM

Lack of capacity and funding. The discovery of coal in Kitui has yet to be extracted 7 years later. How then, the copper, in two years?

THE TRUTH

Kenya cannot effectively begin mining operations, whether via private or public means, in less than two years and further scale it up to earn Ksh 400B per month, within that time frame. Going by the experience of Base Titanium, which took 18 years from reconnaissance to the start of operations, we can safely say less than two years to market is a fanciful venture.

Base Titanium - From Reconnaissance to Production
Base Titanium – From Reconnaissance to Production [A].
The surrounding politics, local development, resource sharing, jobs, relocation of people living within the mining area, land acquisition and compensation are other nightmares that will have to be contended with.

Copper prices has risen 21% due to under-investment in the sector globally. This has caused demand for the mineral, which is good news for the producers as they can fetch higher prices.[1]. This would be good for Kitui County and the nation at large should the project take off.

Zambia is the largest copper producer in the world, and the largest in Africa by proven reserves. The mineral has however not been the panacea to its debt problem. It currently owns 10% of the Mopani Copper Mines Ltd, while the rest of the shares are held by Swiss and Canadian-based foreign companies [2].

The skewed shareholding is a point to note; that without full national ownership, the resources do not benefit the nation.

CONCLUSION

We will not be able to pay our debts in two years under an One Kenya Alliance (OKA) government utilising natural resources within the borders.

Source
Story quote from Citizen DigitalImage courtesy of Standard Media[A] Screenshot from Base Titanium ESIA[1] CNBC[2] DW

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