Kenya has unveiled plans to restrict the direct export of valuable minerals in their raw form, marking a significant shift in policy aimed at increasing government revenue and fostering local industry. The move coincides with the ongoing construction of a massive KSh5.8bn (about $45 million) gold processing plant, a project that is expected to significantly enhance Kenya’s capacity to process minerals domestically.
Speaking on the development, Kenya’s Principal Secretary for Mining, Elijah Mwangi, stated that the gold processing plant, as well as a granite processing plant worth KSh2.5bn, would be completed by mid-2025. The gold facility will be located in Kakamega, with the granite plant situated in Vihiga County. These plants will focus on adding value to gold, gemstones, and granite, aiming to ensure these resources are refined locally before export.
This policy shift aligns Kenya with other African nations, including Ghana, Tanzania, and Zambia, which have implemented or tightened regulations on the export of raw minerals to enhance domestic value addition. These countries recognise the financial losses from exporting raw materials and seek to benefit from higher revenues, job creation, and a stronger local economy by processing minerals domestically.
According to Reuters, about $15.1bn worth of gold from Africa, was exported to the UAE in 2016, more than any other country and up from $1.3bn in 2006.
Mwangi emphasised that this shift would strengthen Kenya’s economy by improving revenue streams and bolstering the private sector, which has historically been weakened by the reliance on raw exports. ‘Our economy has been neutralised by a model that exploits raw materials without significant local processing, leaving our domestic private sector too weak, and our young talent in search of opportunities abroad,’ he said.
Kenya’s decision comes after years of critique over the loss of potential revenue when raw minerals are processed overseas. Experts argue that this long-standing practice has deprived African nations of billions in potential earnings. According to McKinsey, Africa could generate between $200 million and $2bn in additional annual revenue by 2030 and create up to 3.8 million jobs by developing a competitive, low-carbon manufacturing sector for mineral processing.
Kenya’s new approach will ensure that minerals such as gold, gemstones, and granite are refined within the country, creating a value chain that benefits local businesses and workers. The plants are expected to increase Kenya’s GDP and contribute to the government’s target of reducing the budget deficit.
The gold processing plant in Kakamega is part of a broader strategy to tap into Kenya’s mineral wealth.
Kenya now joins approximately 10 other African nations in enacting policies to restrict the export of raw minerals. This shift comes in response to a growing awareness of the economic potential locked in Africa’s rich mineral reserves, which include 92 percent of the world’s platinum, 56 percent of cobalt, 54 percent of manganese, and 36 percent of chromium. These minerals are critical for green technologies such as electric vehicle batteries and wind turbines, making them even more valuable as the global demand for sustainable energy solutions rises.
However, industry stakeholders are calling for caution as Kenya embarks on this ambitious path. Some African countries that introduced similar export bans have struggled to maintain them due to infrastructural deficits and logistical challenges. Benedikt Sobotka, CEO of Eurasian Resources Group, warned that without the necessary infrastructure and support, export restrictions could backfire, leading to abandoned policies, as seen in other African nations.
Despite these concerns, Kenya remains optimistic about the potential benefits of local value addition. The government’s plans to reform its mineral export policies are expected to not only increase revenue but also reduce the country’s reliance on raw exports. This strategic move is a crucial part of Kenya’s broader economic agenda to strengthen its position in the global mineral market while creating more jobs and improving livelihoods for its citizens.
Kenya’s new mineral processing plants are a bold step towards a more diversified economy. If successful, the country could become a leading example of how African nations can harness their natural resources for domestic growth and long-term sustainability.
According to Reuters
