1. AFRICA INDUSTRIALIZATION DAY
20TH NOVEMBER 2013,
Theme: Job Creation and Entrepreneurship Development:
A Means to Accelerate Industrialization In Africa
Emerging Opportunities for
Industrialization:
Oil, Gas and Minerals
Amb. Dr. J. K. Kiplagat
Director Industrial Information and Research
Ministry of Industrialization and Enterprise Development.
P.O. Box 30418-00100.
Nairobi. Kenya.
jkkiplagat@yahoo.co.uk
Ministry of Industrialization & Enterprise
Development
Promoting and Facilitating
Industrialization

2. The Standard Wed 20th November 2013
―President Kenyatta said Kenya recently
discovered economically viable reserves of
natural resources, among them
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underground fresh water,
coal,
oil and
natural gas
which will be exploited for the benefit of all
Kenyans. ―We are already reaching out to
various Arab states to encourage their
private investors to consider the
opportunities in Kenya in the oil, natural
gas and energy sub-sectors,” the
President said.
President Kenyatta was speaking during the
3rd Afro-Arab Summit in Kuwait‖
2

3. Every Kenyan City – Year 2030

4. Low per
Capita
Income
Unemployment
High Demand
for Social
Support
Africa’s Vicious Circle
Reduced interest
for Local and FDI
in manufacturing
etc
Less Funding
for
Development
Programs
Poor
infrastructure
and support for
investment

5. Challenges affecting Industrial Development
Kenya is seeking to industrialize in a highly competitive global environment
Inadequate
Institutional
framework
ENERGY
Low productivity
Counterfeits and
and
Sub standards
competitiveness
Training in
Science, Eng.
Technology
Low Value
addition &
Diversification
Infrastructure, all
including
Industrial land &
ICT
Access to
affordable long
term finance.
Limited
Industrial
Incentives
Lack of
Low funding for harmonized
Industrial
R & D in
industrial
policies
activities
Limited sector
budgetary
support

6. Fixing
the
Problem
Eradicate
Extreme
Poverty
Dev.
Global
Partnership
By meeting
the 8 MDGs
By 2015!
Achieve
Univerl
Prim. Edu
Promote
Gender
R&D
equality
SUSTAINABLE
DEVELOPMENT
Ensure
environt.
sustain/bility
Combat
HIV/AIDS,
Diseases
Improve
Maternal
Health
Reduce
Child
Mortality

7. Fix the
Problem
Physical
infrastruct
Energy
R&D
Good
Governance
Industrialization
Training
Access
Finance
Institutional
Framework
Urgently

8. Historical: Review of Past
Policies
Import Substitution Policy (1970-1980’s)
 Structural Adjustment policies (1980 – 1990’s)
 Export oriented Strategies (1990’s onwards)
 Sessional Paper No. 1 of 1986 on Economic
Management for renewed growth
 Sessional Paper No. 2 of 1992 on Small Enterprise
and Jua Kali development in Kenya
 Sessional Paper No. 2 of 1997 on Industrial
transformation to the year 2020
 Economic Recovery Strategy for Wealth and
Employment Creation (2003 – 2007)
 Sessional paper No 9 of 2012 on National
Industrialization Policy Framework.


9. INTERVENTION THROUGH THE NIP
Vision, Mission & Goal of NIP
• Vision: To enable Kenya become a regional
leader in industrial growth & development
contributing upwards of 15% of the annual
national GDP;
• Mission: To spur industrial economic growth by
creating an enabling environment with targeted
incentives in priority sectors that promote
country-wide dispersal of industries in order to
realize equitable economic empowerment for all
Kenyans.
• Goal: To increase contribution of manufacturing
sector to GDP by at least 10 per cent per
annum.

10. Priority subsectors
AgroMachine tools Agro Machinery
Iron and Steel
and farm
processing & industry
and spares
implements
Value addition
Wood and Wood
Paper and Paper
Automotive
Textiles and
Industries
Products
and Auto parts
Clothing
Meat and Dairy
Leather and
Products
Leather
Products
Electrical and
Electronic
Products
Mining and
Quarrying
Ceramics Industry Glass Industry
Pharmaceuticals
Industry
Recycling
Materials
Packaging
Industry
Fish and Fishery
products
Petrochemicals
Industry
Green Energy
Biotechnology
Nanotechnology

11. Thermal Power Generation
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A fossil-fuel power plant burns fossil fuels coal,
natural gas or petroleum to produce electricity
A nuclear plant uses energy from nuclear fission of
uranium or plutonium.
Biofuels that can be burned to heat water.
Geothermal energy from volcanic steam.
Heat energy energy extracted from expanding gas,
steam or combustion gases is converted into
mechanical energy, which then operates an
electrical generator.
The prime mover may be a
 steam turbine,
 a gas turbine or,
 I.C engine.
Coal is the most abundant/used
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12. Thermal Power Generation
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A fossil-fuel power plant burns fossil fuels coal,
natural gas or petroleum to produce electricity
A nuclear plant uses energy from nuclear fission of
uranium or plutonium.
Biofuels that can be burned to heat water.
Geothermal energy from volcanic steam.
Heat energy energy extracted from expanding gas,
steam or combustion gases is converted into
mechanical energy, which then operates an
electrical generator.
The prime mover may be a
 steam turbine,
 a gas turbine or,
 I.C engine.
Coal is the most abundant/used
12

13. East Africa’s Mineral Resource
Driven Growth
Investment into Africa‘s burgeoning oil
and gas sector is expected to rise in
coming years as big oil companies and
foreign investors from the US, Europe
and Far East finance existing and new
projects in the continent.
 Foreign investors are excited by the
―growth in Africa". ―They are seeing the
positive developments in Africa
 They are seeing Africa as one of the
primary growth vehicles of the future and
they are willing to invest in it.
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14. The Basin of Black Gold
Kenya's Great Rift Valley, a 450-mile-long
volcanic trench ripped open by shifting
tectonic plates, is known as the cradle of
mankind for the million-year-old remains of
human forebears discovered there.
 The area also holds a string of fields that
could make Kenya, East Africa's largest
economy a major energy producer.
 The U.K.'s Tullow Oil, and Canada's Africa Oil
found oil deposits that could yield 10 billion
barrels:
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◦ enough to supply Kenya for three centuries.

―I've never seen a basin of this magnitude!‖
Africa Oil CEO
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15. ‗Foreign investors are keen to
invest in the Kenya‘s ICT,
energy, infrastructure,
pharmaceutical and agribusiness
sectors.‘ Business Daily
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16. Black Gold within ours Borders


Kenya can now be likened to a fair lady
grabbing the attention of foreign suitors out
to woo her to sign deals.
In a space of 30 days or so, hordes of
foreign visitors have flown into Kenya‘s
capital, Nairobi. And no, they are not after
the fun and sun this city in the Savannah of
East Africa glows under.
◦ It is matters business.

A delegation of about 106 company
representatives from Morocco made its
way into the country first, followed by that
of the United Arab Emirates (UAE). South
Korea was next and followed by Hong
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17. Kenya seen as a gateway
These delegations are keen to invest in
the country‘s ICT, energy, infrastructure,
pharmaceutical and agribusiness
 Kenya is widely seen as a gateway into
the hinterland of the East and Central
African countries which are endowed
with huge deposits of minerals too.
 Oil is an economic catalyst, thus the rush
of investors.

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18. Coal, Titanium, Niobium&Iron Ore
Other minerals like coal in Kitui, titanium
and rare earths in Kwale, Iron ore in
Taveta and Homa Bay and fluorspar in
Kerio Valley that are viable for
commercial exploitation, has also
signaled a welcome open door for
investors.
 Kenya‘s technological advancement
that is characterised by massive use of
innovative products in financial,
telecommunication and construction
sectors could also explain the
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19. Kenya’s index of doing
business to rise
The single window system which is under the
custodian of the Kenya Trade Network Agency
(Kentrade) will integrate the functions of all
government agencies involved in cargo
certification process into an electronic one stop
shop.
 The anticipated benefits from the system will
continue attracting investors.
 Kenya is ranked position 121 out of 185 countries
.With the system in place, the World Bank‘s
ranking of Kenya‘s index of doing business is
expected to spike significantly.
 In addition, most foreign investors find Kenya‘s
workforce aggressive and competent, an
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20. The Golden Lokichar
Basin
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21. From Grass to Glory
Kenya is headed to become the first oil
exporter in East Africa, moving in less
than five years from being a have-not
nation to the regional oil exporter.
 After Tullow Oil Plc (TLW) discovered oil
last year, Kenya is set to start shipments
in 2016, overtaking neighboring Uganda,
where Tullow found crude more than
seven years ago.
 Kenya's deposits may top 10 billion
barrels, more than three times the U.K.'s
remaining reserves.
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22. The Golden Benefits!

Oil will allow Kenya to:◦ diversify export earnings and
◦ act as a catalyst for infrastructural
spending, especially on the transport
network.
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Roads
Railways
Airports
Ports
The shilling is expected to benefit from:◦ inflows of foreign exchange and
◦ reduced spending on fuel imports.
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23. Ngamia, Twiga and Etuko.
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Kenya imports all its fuel, almost 80,000
barrels of oil a day at a daily cost of more
than $8 million.
It relies on exports such as coffee and tea to
support the balance of trade in the $37
billion economy.
Tullow estimates it has found more than 300
million barrels of oil in South Lokichar Basin.
The wells are: Ngamia, Twiga and Etuko.
In February 2013, Twiga became the first
well in Kenya to produce oil at a
commercially viable rate and has the
potential to produce 5,000 barrels a day.
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24. After 50 years of
disappointments! to Tullow's entry, 30
 Between 1960 and 1992, prior
wells were sunk around Lokichar area:◦ 13 were dry,
◦ 12 encountered non-commercial gas shows and
◦ five encountered signs of oil staining
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The golden find is in Turkana County. Shipments will
initially be made by truck or train for refining in
Mombasa or exports. Once more fields are discovered
and developed a pipeline can be built.

Kenya Petroleum Refineries Ltd., the nation's sole
refinery, half-owned by Essar Energy Plc (ESSR),
refines imported crude mainly from Abudhabi
◦ It can now warm up for home grown raw material
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25. Twas West Africa Now its
East Africa
The continent's oil industry was centered
on Nigeria in West Africa.
 East Africa had been overlooked. Of the
more than 30,000 wells drilled in
Africa, fewer than 500 were in East
Africa.
 There was a giant underexplored hole on
the map!
 Most oil companies traditionally had
focused on the African powerhouses of
Nigeria and Angola to the west, and
Libya and Egypt on the Mediterranean.
 Now the world has woken up to East
Africa.

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26. 26

28. After the Black Gold it is the Gas

A consortium of companies searching
for minerals off the Kenyan coast said it
had discovered 52 metres of natural gas
reserves on Mbawa-1 well off the coast
of Malindi.— giving Kenya its first ever
gas find.
◦ the first hydrocarbon discovery offshore
Kenya

The gas find was made at a depth of
2,553 meters and its operators said they
intend to continue drilling to the depth of
3,275 meters, more in the hope of
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29. The Benefits

The discovery of economically-viable reserves of
natural gas will help Kenya attract part of the
huge investments arising from the global shift
towards cleaner sources of energy.
◦ Alot of investors are today keen on putting their
money in cleaner and sustainable sources of
energy.

Though more expensive to produce and ship to
the market it is preferred because:
◦ of its low pricing compared to oil and
◦ its friendliness to the environment.
Natural gas has relatively high hydrogen content
and burns about 50 per cent cleaner than coal
and roughly 30 per cent cleaner than oil.
 The higher the hydrogen content in fuel, the
cleaner it is.
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30. Natural Gas 2nd largest fuel
source by 2025
Natural gas will overtake coal to become the
second largest fuel source by 2025.
 Tanzania has received massive inflow of
foreign investment into its natural gas
industry earning $2-$3 billion annually.
 The gas is already being used to generate
electricity and to power industries –
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◦ significantly reduce the cost of energy to
manufacturers and raise the country‘s clean
energy credentials.

The US Geological Survey estimates that
more than 250 trillion cubic feet of natural
gas may lie off Kenya, Tanzania and
Mozambique coastline.
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31. Role of Resources in African Development
Mineral Export Concentration, Selected Countries. 2005
(Percentage of Total Exports)
Country
Main Export
Other Exports
Botswana
Diamonds
88.2%
Oil 99.9%
Cocoa 46
Tea 16.8
Oil 92.2
Platinum. 12.5
Gold 10.9
Copper 55.8
Oil 49.2
Nickel 8.1
Chad
Ghana
Kenya
Nigeria
S. Africa
Tanzania
Zambia
Sub-Saharan
Africa
Manganese 7.2
Flowers 14.2
Coal 8; Gold 7.9
Fish 9.7; Copper 8.6
Cobalt 7
Diamonds 12.6; Nickel
7.8

32. Map that shows distribution of minerals in
Sub-Saharan Africa.

33. Bauxite is used to make aluminum. West Africa
has large deposits of bauxite.

34. Africa is the world‘s largest producer of diamonds.

36. Diamond mining in West Africa.

37. Drilled core of
coal from Mui
Basin
Drilling for
coal
assessment
in Mui Basin
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38. The highlighted zone on the map of Kenya traces the mineral rich
area and it is evident that iron ore follows a consistent northwesterly
trend from Taita to Meru along the foliation of metamorphic rocks.
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39. Empirical Validity of the
“Resource Curse”
Countries that might have the
“Resource Curse”
◦ High mineral export dependence on one or
a few minerals
◦ Especially petroleum exporters (“Oil
Economy Syndrome” )
◦ High Foreign Exchange and Fiscal
dependence on the resource export
◦ High levels of Direct Foreign Investment in
the resource sector

40. Before the Oil and Gas!
After the Oil and Gas!
Petronas twinTowers
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41. Should we go that way so that the
City and the country is lighted?!
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42. High per
Capita
Income
Employment
Food & Energy
Security
Disease Free
Low Demand
for Social
Support
AFRICA’S’S
SUCCESS STORY
More
Funding for
Development
Programs
Increased
interest for
Local and
FDI
Good
infrastructure
and support
for
investment