Create jobs through mining industry, UN agency tells Africa

An oil rig at Ngamia 1 in Turkana County. According to UNCTAD, the mining industry only accounts for one per cent of the continent’s workforce and is insufficient to promote economic growth. PHOTO | FILE 

By IMMACULATE KARAMBU, ikarambu@ke.nationmedia.com

In Summary

• Given their capital intensive nature, extractive industries do not create many direct jobs.
• However, they offer opportunities for support industries such as catering, logistics and security, among others, which can absorb a large pool of workers.

The United Nations Conference on Trade and Development (UNCTAD) wants African governments to create more direct and indirect jobs through the extractive industries to drive prosperity of the region.

According to the United Nations (UN) agency, the nascent oil, gas and other mining industries currently account for just one per cent of the continent’s workforce, which it reckons is insufficient to further economic growth and foster social inclusion.

The push for increased employment opportunities came up during the 17th Africa Oil, Gas and Mines Conference (OILGASMINE) held in Khartoum, Sudan, organised by UNCTAD which ended Thursday.

It brought together experts and industry practitioners as well as policy makers from around the world to explore potential for production of oil, gas and minerals in Africa.

“The benefits that the extractive industries could bring to developing countries include revenues for host countries through production sharing agreements, royalties and income taxes. The development of the extractive industries could also generate wider economic benefits and promote inclusive growth and sustainable development,” said UNCTAD in a statement.

The UN estimates that in Africa, only five million jobs are created for more than 12 million young people entering the labour force annually in Africa.

Africa is home to eight per cent of the world’s oil and gas reserves. The United States Geological Society also ranks the continent second in its share of World’s reserves of various metals including industrial diamond, rutile, ilmenite and zirconium, among others.

Given their capital intensive nature, extractive industries do not create many direct jobs. However, they offer opportunities for support industries such as catering, logistics and security, among others, which can absorb a large pool of workers.

The UNCTAD conference comes against the backdrop of weak international prices of oil and minerals that has hindered investment in production.

In Kenya, for instance, industry analysts say that activity in the upstream oil and gas sector has reduced by half as companies redirect their resources to fields where they are already producing leading to job losses.

In September, the International Monetary Fund (IMF) released a report indicating that developing countries that are dependent on oil and commodity exports would see a drop in their growth by as much as two per cent in the period to 2017 owing to low commodity prices.