Kenya’s planned sovereign wealth fund will be set up before the expected flow of oil money from Tullow Oil Plc and Africa Oil Corp.
Acting Central Bank of Kenya chairman Mbui Wagacha said the framework for the sovereign wealth fund had been completed and that it was being fine-tuned at the Attorney-General’s office.
The fund is meant to shield the economy from cyclical changes in commodity prices, build savings for future generations and support investment in infrastructure.
“We are unique in Kenya in that we are setting up our sovereign wealth fund prior to the phase of exploitation of natural resources. This fund will come handy in times of difficulties or volatility. What it will need are skills in fund management, investment and operations,” said Dr Wagacha, also an economic adviser to the President.
Tullow and its partner Africa Oil, which found Kenya’s first crude oil in 2012, are working with the government on a plan to start field development and export pipeline construction as early as next year.
The two firms expect to start pumping by 2016. Kenya is also seeking to develop its mining potential to derive more income from an industry that represents less than one per cent of the gross domestic product, according to government data.
The country is a major producer of soda ash and has deposits of minerals, including coal, gold and gemstones.