M a r k e t N e w s

Kenya pegs faster Vision 2030 gains on oil and gas finds

Posted on : Tuesday, 22nd November 2016

 NAIROBI: Kenya is betting on the recent oil discoveries to achieve its vision of becoming a middle-income economy ahead of the 2030 deadline.

The Vision 2030 Delivery Secretariat expects the nascent industry to reach major milestones a few years after commercial production starts in 2020.

Oil and gas were recently included in the list of key sectors that are expected to play a critical role in driving the economy to achieve the Vision 2030 goals.

Vision 2030 Delivery Secretariat Director General Julius Muia said when commercial production starts, the sector will within a short time be able to account for more than 10 per cent of the country’s Gross Domestic Product (GDP).

The Secretariat is not bothered by the current prices that have hit historical lows in the recent past, trading at $30 (Sh3,030) a barrel in September last year, dampening Kenya’s prospects as a future oil exporter. It also resulted in a scaled down of investments by exploration firms in the country. Currently, a barrel is going for about $45 (Sh4,540). There is also a global push to consider cleaner energy sources.

 
“The prices of oil are at their lowest at the moment and all indications are that they can only go up.
 
Economies, especially in Africa, are growing, populations are growing and so is the use of equipment that needs oil to operate, including industries and transport,” said Dr Muia.
 
Households are also moving from traditional wood fuel to liquefied petroleum gas. All this implies growing demand for oil.
 
“In this sector, money is not necessarily in pulling the resource from the ground, but also in the ancillary services, meaning in addition to oil, we should also focus on servicing the industry.”
 
Muia spoke on Friday when the secretariat launched a campaign dubbed Tunatimiza (We are fulfilling) to popularise Vision 2030 projects. The delivery of the country’s development blueprint has faced challenges that have delayed completion of key challenges.
 
Key among these include funding of projects, where in addition to the budgetary constraints, lengthy land acquisition procedures as well as people out to profiteer from the procedures complicate the process and in turn drive up the costs that result in project delays.
 
Vision 2030 Delivery Board Chairman James Mwangi, who is also the Equity Bank chief executive, said there has been major progress. “We are comfortable with the progress of mega flagship projects, with high prospects they would be complete within set timelines, some even earlier,” said Dr Mwangi.
 

Source : www.standardmedia.co.ke
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