Kwale, Kilifi and Kajiado will receive the lion’s share of the Sh2.9 billion mining proceeds held by the Treasury since 2016.
The amount is 20 per cent of all royalties collected by the ministry since 2016—Sh14.7 billion.
Collectively, the three counties will receive Sh2.7 billion, which is 93 per cent of what the counties are owed.
According to the Mining Act, of 2016, sharing of mineral royalties is at a ratio of 70 per cent to the national government, 20 per cent to the county government and 10 per cent to the community. A legal lacuna has been blocking counties from accessing their share, but this has been resolved by the coming into force of the County Governments Additional Allocations Act 2022.
Yesterday, Cabinet Secretary for Mining and Blue Economy Salim Mvurya said the allocation of funds is dependent on the number of investors in each county and therefore the distribution of funds is directly tied to the mining activities in every county.
He said the government tracks mining through the establishment of mines by license holders, and the number of investors per mineral determines the allocation of funds. As a result, Kwale, Kilifi and Kajiado, with a high concentration of investors in specific minerals, will receive a more significant share of the royalties.
“Once the ministry issues licenses and investors begin mining, the funds are disbursed based on the activity in the area. For instance, Kwale has a high number of titanium investors, Kilifi has several manganese investors and Kajiado is home to many cement companies,” said Mr Mvurya.
The CS revealed that only 32 counties out of the 47 in the country will benefit from the withheld cash and that only 15 of the devolved units will get more than Sh100,000.
“Although not all counties will benefit, we assure the public that the decision was made based on fair and objective criteria, we have now concluded the processing of the 20 per cent and we have given data to the National Treasury.
“There are only 32 counties that will benefit from it. We have made calculations for each county and they are now able to know how much money they will receive,” said Mr Mvurya.
The funds will be a welcome relief to the counties as they continue to grapple with a cash crunch brought on by the government’s failure to disburse the equitable share of revenue since December last year.
In 2019, the government stopped renewing licenses for rare earth, which had previously sparked a battle for control of their licensing. According to the ministry, the licensing process will remain on hold until the ground truthing exercise is completed.
“We have a moratorium where we are not issuing new licenses and the reason is we are doing a lot of reform. One is to have data and do ground truthing and we are also doing online cadaster (register) which will allow us to have applications online. Once we are through with that, we can resume giving out the licenses,” said Mr Mvurya.
About the 10 per cent share to communities, the ministry has constituted a task force that is set to develop the regulations by the end of this month.
“Counties will be engaged for their comments on the draft regulations before they are adopted,” the CS said.
According to the Kenya National Chamber of Commerce and Industry, the mining sector currently contributes less than 1 per cent to Kenya’s GDP but has the potential to contribute 4 per cent to 10 per cent.
“In two years we want to contribute 10 per cent to the economy of the country. We aim to make sure that the mining sector adds to the growth of the country’s economy,” said Mr Mvurya.
On March 13, the ministry released a report indicating that it has found 970 minerals nationwide. The minerals were classified as “potential prospects” for further exploration to establish their nature, economic viability and estimated total worth.
The 970 minerals include industrial minerals, base metals, precious metals, rare earth and radioactive minerals, gemstones and construction and building materials.