3 April 2014

Kenya: Wealth Fund Established Before Mineral Exploration

Nairobi — THE country has begun plans to set up a sovereign wealth fund ahead of the major commercial production and export of oil and other minerals.

This development puts Kenya among other peers in Africa such as Botswana, Nigeria and Ghana, which all have sovereign wealth funds in line with their established mineral and oil commercial production.

“Kenya is however in a unique position owing to the fact that it is establishing its fund ahead of commercialization of the mineral commodities.

"We are setting up a sovereign wealth fund prior to exploration of natural resources,” said Dr Mbui Wagacha, Chairperson, Board of Central Bank of Kenya.

During a media briefing, Wagacha said that the Attorney General's office was currently working on a Sovereign Wealth Fund Bill that would ensure the fund was rooted in law.

Wagacha said the country joined other developing countries in Africa which already had operational sovereign wealth funds.

He cited Botswana, which he said had a sovereign wealth fund of US$7 billion while Nigeria had a $1 billion fund.

Wagacha said the fund seeks to preserve a heritage for the future generations who might come after the resources have been depleted.

“The sovereign fund will be utilized in developing of infrastructure,” said Dr. Wagacha.

The establishment of a sovereign wealth fund is one of Jubilee-led government's electoral promises.

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