BLACK GOLD:<br />
What Will Oil Do For (or To) Kenya?

News from the African continent buzzed on Twitter as #TurkanaOil rose into the top ten global trending topics. 

Kenya struck black gold.

During a national press conference, Kenya's Energy Minister Kiraitu Murungi proudly held up a glass vile filled with thick, crude oil, "We will make sure that the oil in Kenya is a blessing for the people of Kenya and not a curse," he declared.  A hopeful statement, but one imbued with both the promise and despair the discovery of oil has brought to so many other African nations.

'The resource curse', 'the Dutch disease', 'the paradox of plenty' are all descriptors for how potential financial gains of the petroleum industry often become mired in corruption, debt, and environmental degradation.  Perhaps the best, or worst, example is petrol powerhouse Nigeria.  The discovery of Nigerian oil coincided with a perfect storm of national sovereignty, civil war, excessive foreign lending, and Niger Delta oil fires.  To date, Nigerians live with the stark dichotomy of the wealth and poverty.  Although Nigeria accrues $120 million (US) daily from oil exports, most Nigerians continue to live off $2 a day.

Avoiding the same pitfalls may present a challenge for Kenya’s flailing economy.  In 2011 the Kenyan shilling gained notoriety as the world’s worst performing currency after its value sharply declined, interest rates skyrocketed, and inflation neared 20 percent.  Although Kenya’s economic and political situation is more stable than most of its East African neighbors, standard of living for most Kenyans has taken a hit over the last decade.  Nearly half of all Kenyans live on less than a dollar a day and are unable to meet their daily nutritional needs.

Poverty is a struggle known all too well in the newly oil rich Turkana County. Located in Northern Kenyan, its arid lands and the daily struggle for potable water have grown more extreme as climate change threatens already scarce resources.  Yet now the discovery of petroleum presents a new potential beginning for the community. 

“Oil in Turkana, Cement in Pokot, North Rift is saying goodbye to poverty and cattle rustling!” tweeted @amon_gallis.

Despite growing excitement from the region absent of adequate healthcare and basic amenities like electricity is palpable, much of Kenya’s exporting future remains contingent upon the British oil firm Tullow and how the government will navigate international interests hungry for East African resources.

The scramble for Africa’s resources dominated by European colonial powers in the late 19th and early 20th centuries has seen a 21st century revival on the continent, but now with more players from farther West and East.  The United States along with China and several oil producing Middle Eastern nations directed its investments towards East Africa adding their names to a long list of those eager to capitalize on African energy potential.

Poverty is a struggle known all too well in the newly oil rich Turkana County.Yet now the discovery of petroleum presents a new potential beginning for the community.

While Tullow Oil PLC continues to excavate in Turkana, pressures from the World Bank, the International Monetary Fund (IMF), and global economic powerhouses to its East and West mount, ready to offer the same services to develop the new oil industry lent to Nigeria and other oil-bearing West African nations.  However, Kenya may find its strength and guarantee Energy Minister Murungi’s promise to make oil a blessing and not curse through East African solidarity.  

According to Kenyan oil industry expert Patrick Obath, it would be wise for Kenya and its oil-rich neighbors: Uganda, Ethiopia, South Sudan, and Tanzania to develop its industries collectively rather than independently.  Obath suggests that if these countries were to invest a world-class refinery as one group they could lower the unit cost of production and instantly make East African products competitive.

Though Kenyan oil is not projected to enter the marketplace projected for another three years, its government must implement solid frameworks (like Obath’s proposed East African investment bloc) in order to maximize its oil wealth.  Taking a lesson from the Norwegian example, Kenya could raise Turkana, its nation, and potentially its region out of poverty through the creation of an oil account similar to The Petroleum Fund of Norway, which uses its revenues to equally distribute wealth. 

During this long excavation period, the key for gaining the most from future oil earnings will be to get Kenya’s politics and governance right now.  In this regard Kenya possesses a head start as one of Africa’s most democratic nations; however it must evade internal political/economic corruption and the lure of short-term cash gains presented by external investors.  It is at this juncture Kenya must begin to build its oil future and decide whether to go the way of Nigeria or Norway.

Jamila Aisha Brown is a freelance writer, political commentator, and social entrepreneur.  Her entrepreneurship, HUE, provides consulting solutions for development projects throughout the African Diaspora.  You can follow her on Twitter and engage with HUE, LLC.