Kenya joins other African countries to restrict export of raw gold, other minerals

Kenya has initiated plans to restrict the direct export of valuable minerals in their raw forms from the country.

This follows the ongoing construction of mega gold processing plant worth around Sh5.8 billion which authorities say, portends a major policy shift to increase revenue for the government.

According to Kenya's Principal Secretary for Mining, Elijah Mwangi, the building of the gold and granite plants is projected to be completed mid-next year.

He also added that gold, gemstones, and granite will be the first batch of minerals to be exported from the processing plant after value addition.

The gold refining plant is a multibillion - shilling deal recently sealed between Kenya and a league of private investors which will be situated in Kakamega and a granite processing plant worth Sh2.5 billion which will be located in Vihiga County.

Kenya, with this update will be joining about 10 other African nations that have already placed restrictions or tightened regulations on the exports of valuable minerals from their regions..

Over the years, the raw exports of these commodities have been frowned at following the loss of funds by the continent as processing is carried out elsewhere.

According to McKinsey, Africa could earn between USD 200 million and USD 2 billion of additional annual revenue by 2030 and create up to 3.8 million jobs by building a competitive, low-carbon manufacturing sector.

Africa currently boasts of a huge share of the global mineral reserves – including 92% of platinum, 56% of cobalt, 54% of manganese and 36% of chromium. These minerals are also utilized in green technologies such as electric vehicle (EV) batteries and wind turbines.

Currently, these minerals are largely exported in their raw forms from Africa where they are refined abroad. Africa therefore needs to increase its chances of creating a value addition chain by developing its processing capacity which will allow the export of intermediate goods or final products.

According to experts, this will drive economic development on the continent by creating jobs and resulting in higher tax and income revenues.

According to Reuters, about $15.1 billion worth of gold from Africa, was exported to the UAE in 2016, more than any other country and up from $1.3 billion in 2006.

Reuters also confirmed that there were also no official records of the gold exports from African states and according to five trade economists interviewed, this revealed the huge volume of gold which left the continent with no taxes being paid to the states that produce them.

Some African countries that have implemented policies to restrict the export of raw gold and other minerals, in an effort to promote local processing and value addition, include:



Stakeholders have however, called for caution as Africa takes this dire step towards protecting its natural resources. The calls comes amid the continent's high infrastructural deficits .

According to Benedikt Sobotka, CEO of the Eurasian Resources Group (ERG), there were no automatic benefits from the export bans placed on the raw minerals following the number of African countries that have almost immediately abandoned the policy soon after implementation.