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Local firms should invest in extractive sector – EADB

The East African Development Bank (EADB), has advised local companies in the region to develop capacities and invest in extractive industries following the discoveries of oil and other minerals in East Africa.

Developments in the extractive industry show that local companies in East Africa have not invested big in the extractive industries despite the region having vast natural resources.

In a statement issued last week, the EABD director general Vivienne Yeda said: “It is a continuing puzzle and challenge to all of us that there is a negligible number of African owned companies in the natural resources sector more than 100 years after resources such as gold and diamonds were discovered.”

Ms Yeda, however, said with this new discovery of more minerals, there is hope that indigenous companies will begin to emerge and to develop capacity to invest and develop large scale projects in the sector.

Evidence shows most of the companies involved in the extractive industry in East Africa and Africa at large are multinational companies of foreign origin; this is partly because of lack of capacities and capital by local companies.

On the other hand, East African and African countries at large are faced with the problem of high monetary deficits due to limited source of revenues to the government. In this regard, Ms Yeda said Africa should adopt dynamic and creative monetary regimes.