International Finance
Oil & Gas

Oil and gas development to boost Kenya’s economic diversity

Kenya oil
The ICAEW report highlights how East Africa’s growth is mainly driven by strong performances in Kenya and Ethiopia

A survey conducted by the Institute of Chartered Accountants in England and Wales ( ICAEW) revealed that the recent development in Kenya’s oil and gas sector will help the country boost its economic diversity.

The ICAEW report revealed that many African nations are suffering due to the US-China trade war and a slump in commodity prices which is affecting exporters. But, Kenya’s diversified economy helped by oil and gas development has cushioned the country from external shocks.

The newly discovered Turkana fields, located in Kenya’s arid north-western region holds 560 million barrels of oil. However, Kenya is still years away from building the proper infrastructure to unlock its full commercial oil-producing potential. But despite that, it gives Kenya a chance to enhance its economic diversity and include oil export as a foreign exchange earner.

During the launch of the ICAEW-Economic Update: Africa Q3 2019 report, Michael Armstrong, ICAEW’s regional director of the Middle East, Africa and South Asia told the media that, “A strong service sector keeps Kenya’s economy shielded from the trade war currently raging between the United States and China, while also protecting it from global commodity price slumps.”

He added, “This diversity has played a key role in helping Kenya to weather the storm caused by the instability of oil prices. This, in addition to a well-regulated, mainly private services sector is key to the survival of the economy.”

The ICAEW report also highlights how East Africa’s growth is mainly driven by strong performances by Kenya and Ethiopia.

In the month of August, Kenya became the first East African nation to join the ranks of oil-exporting countries. Kenya’s President Uhuru Kenyatta also signed a bill that regulates oil exploration and production and outlines how revenues will be shared between the government, local communities, and companies.

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