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EA’s private sector urged to invest in oil and gas mining

The private sector in East Africa has been urged to invest in the oil and gas sector so as to leverage from these resources.

This follows recent discoveries of natural resource deposits in the region.

In addition, the private sector has been told to engage policymakers on proposed revisions to legislation, rather than wait until they feel any adverse impact of the legislation.

As deposits of minerals such as oil, gas, uranium and others continue to be discovered in the region’s member countries, sizable economic gains are envisaged from these.

CATALYST SECTORS

But these gains can only be optimised if the region’s private sector operating in key catalyst sectors such as energy, infrastructure and finance invest in exploration and exploitation of these resources.

Many financial service providers in the region have not been quick to provide risk capital to businesses with interests in mineral exploitation because of the risk propensity involved.

This has discouraged regional firms from investing in natural resources exploitation. Some have gone to offshore investment groups like the Toronto stock exchange.

“The East African equity markets should come in and raise capital for the mining and extraction industries. This will enable the region to leverage more on mineral resource benefits,” said Mary M’Mukindia, management consultant of the oil and gas sector of Kenya, during the just ended East African Business Summit in Kigali.

Financial institutions were urged to develop funding products and create financial platforms for those involved in natural resources exploitation

East African countries were also challenged to come up with consistent and visionary regulation of their respective mineral sectors, so that the excitement associated with oil and gas discovery does not overwhelm them.

Among other areas that should be given considerable focus is value addition of the extracted resources.

This will help African move away from being a perennial provider of primary raw materials.

“Value addition needs to be knitted together right from the initial process of mineral exploitation such that Africa moves away from being a permanent provider of raw materials” said M’Mukundia.

SLOWED WORKS

“Infrastructure is a major challenge right now, but it’s also an opportunity, there are towns that are emerging as a result of these resources, the private sector should take up these opportunities, which range from logistics, and provide local content,” she added

Pradeep Paunrana, chief executive of Athi River Mining ,said negotiations with communities had slowed down mining work, noting that negotiations with locals had affected their speed.

He asked governments to facilitate these local processes and find a seamless way of dealing with obstacles.

Tanzania has recently discovered additional 1.2 trillion cubic feet of natural gas in Giligiliani-1 well.

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