Kenya is planning to limit the export of valuable minerals in their unprocessed forms.
This move coincides with the construction of a significant gold processing plant valued at approximately Sh5.8 billion, indicating a major policy change aimed at boosting government revenue.
Elijah Mwangi, Kenya’s Principal Secretary for Mining, stated that the gold and granite plants are expected to be completed by mid-next year.
He mentioned that gold, gemstones, and granite will be the first minerals processed and exported from the facility.
The gold refining plant, a multibillion-shilling partnership between Kenya and private investors, will be located in Kakamega, while a Sh2.5 billion granite processing plant will be established in Vihiga County.
With this initiative, Kenya joins around ten other African nations that have implemented restrictions or stricter regulations on the export of precious minerals.
The trend of exporting raw minerals has been criticized for causing significant financial losses for the continent, as processing often occurs elsewhere.
McKinsey reports that Africa could potentially generate an additional USD 200 million to USD 2 billion annually by 2030 and create up to 3.8 million jobs through the establishment of a competitive, low-carbon manufacturing sector.
Africa holds a significant portion of the world’s mineral reserves, including 92% of platinum, 56% of cobalt, 54% of manganese, and 36% of chromium, which are essential for green technologies like electric vehicle batteries and wind turbines.
Currently, these minerals are mostly exported unrefined from Africa to be processed abroad, highlighting the need for the continent to enhance its processing capabilities for value addition.
Experts suggest that developing this capacity will promote economic growth, generate jobs, and increase tax and income revenues.
According to Reuters, Africa exported approximately $15.1 billion worth of gold to the UAE in 2016, a significant increase from $1.3 billion in 2006.
Reuters also noted a lack of official records regarding gold exports from African nations, suggesting a large volume of gold leaves the continent without tax revenue being collected for the producing countries.
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.