Enhance transparency but be fair to foreign investors

The government has always been keen to attract foreign investment to complement local efforts for national development. Of course, foreign investors are not in it for philanthropy, but for tangible gain. The raging debate on President William Ruto’s apparent targeting of an Indian multinational, Tata Chemicals, over its Magadi soda industry raises some pertinent issues.

One, as foreigners set up enterprises to extract products for export, they must enable locals to also benefit. Following criticism by opposition politicians, the President now says the Magadi ash mining contract will be advertised for competitive bidding.

This will open up the area to other investors, ending the Indian company’s monopoly. His retraction of an earlier statement in which he announced that another firm had been identified to take over the enterprise is intriguing. It hints at the increasing opaque deals by this administration.

A decision with potentially far-reaching ramifications for the local community and other national interests should ideally have been arrived at through public participation. This enables the people to have a say in decisions bound affect them.

The President says a glass and chemical factory will be established to create jobs for Kenyans and that 70 per cent of the 24,000 acres held by Tata Chemicals under lease will revert to the community. However, this could easily lead to the grabbing of this land by corrupt, well-connected individuals, as often happens.

President Ruto’s critics are accusing him of declaring war on investors and planning to chase them away. The engagement with investors should be fair. Tata says it has complied with regulatory requirements and is waiting for a review by the Ministry of Mining.

The Tata Chemicals Magadi Limited saga highlights the challenge of attracting and maintaining foreign direct investment. The country has a right to ensure that public resources benefit its citizens, but not by disadvantaging investors.

There is a need for transparent negotiations rather than sudden Executive expulsions if the country still hopes to attract enough foreign investment.

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