Roping In Locals Key To Success For International Firms Investing In Kenya

Roping In Locals Key To Success For International Firms Investing In Kenya

In Kipeto, a town nestled in the Rift Valley, fields have begun getting cleared and heavy duty trucks are assembling; all tell-tale signs that a major infrastructure project is about to begin.

The town will host a 100 megawatt windmill that will be financed by well oiled financiers including the International Finance Corporation (IFC), the World Bank’s private lending arm.

While the average Kenyan waits with bated breath for the wind mills output to enter the national grid and spare them from the high cost of electricity, locals in the area, mainly from the pastoralist Maasai community, are more eager as they will share in revenues that the project will make.

The pastoral communities will be entitled to $5 dollars for every $100 dollars the wind farm will generate.

This project represents a growing trend of companies making local owners active participants, a move from the past when they were mere spectators whose concerns would be left to bureaucrats in the central government often hundred miles away.

Disclosure documents on the project that have been seen by AFKInsider show that getting everyone on board has not been a walk in the park especially for the youth, the largest segment of the population that that is highly unemployed.

“While extensive consultation has taken place with the landowners and elders, particularly around leases and wayleaves, there has been a gap in consultation with non landowner and vulnerable groups, particularly women. Furthermore, the youth expressed dissatisfaction with their level of involvement in the lease (for the wind farm) and way leave (for the transmission lines) negotiations,” say the documents.

IFC said that they expect that all issues will be ironed out as more consultations with the youth and women continue.

Kipeto is the latest in large projects that are hemming in locals with a view of creating strong and solid businesses.

Other firms have also not had a smooth time but have also engaged local communities as a way of making their future operation sustainable.

“This year, Tullow has committed to spend 400 million shillings ($4.45 million) in social investments projects cutting across health, education, environment and social enterprise. Further, Tullow through its contractors employs over 3600 employees out of which 2300 or six out of every ten is from the Turkana community. Overall, nine out of every ten employees working for Tullow through its contractors are Kenyans,” Tullow told AFKInsider.

Around the same time last year, Tullow Oil, an Africa focused exploration company from the UK, had to shut down operations for two weeks after a standoff with locals in Turkana, northern Kenya, on claims that they are not getting a share from investments going to their home turf.

The company says that apart from jobs and other social programs it has also invested in staff whose role is to solely manage relations with locals where it is working.

“We have a dedicated team in the field whose key role is to facilitate dialogue between Tullow and our stakeholders so that we are able to more effectively manage our impacts and bring greater benefits to local communities,” said Tullow.

Governments are also coming in to help.

In October the UK government hosted local oil companies, communities and civil society organizations to a meeting where participants had a discourse on how interactions can be more mutually beneficial.

The UK government is investing some $5.6 million in local content which it says is necessary to make the extractive industries appealing to investors and appeasing to locals.

“While it can boost an economy and fuel growth in other sectors, it can also distort the economy (the so-called ‘Dutch disease’) and foster conflict and insecurity,” said Christian Turner, UK ambassador to Kenya in a briefing.

There is still a lot to be done but all players say that as more locals feel that they too have a stake, there will be a lesser potential for conflict.