shall Kenya benefit from oil drilling in Turkana by Tullow Economically, some factors may deny Kenya Oil drilling benefits. On the weighing machine against other oil producers Kenya lacks comparative and absolute advantage in oil production. Countries such as Saudi Arabia, Libya have great experience in oil production. They have the best technology, manpower and required knowledge. They do not export manpower and even other resource such as capital goods. They also have the best marketing strategies of their products. They have been able to manage the civil strife that emerged, such as attacked by other nations. An experience of 50yeaars is not a joke. Kenya is too young in production. Middle income to the nation is far miles away especially with rising inflation, since time immemorial we have relied on agriculture and therefore we lack experience in industrial products. If Kenya is to produce oil, it shall not process it. Why? If we process oil it shall be too expensive for the product to sell in the regional market let alone the international market. It maybe unbelievable to majority that even domestic consumption shall be very low. We had locally manufactured textile but wasn’t consumed domestically. For one we have to hire technology, oil production technology is very expensive right from drilling to refining, therefore higher prices for our oil products. At international scene, our prices shall not be competitive. It is to our disadvantage that by selling oil, our economy shall take a longer period of time to realize profits. On the other edge we shall acquire recognition internationally especially when we start drilling and refining oil. This is when other nations shall realize the importance of our nation in the region. If the economist wants to penetrate the international or regional market, an agreement has to be entered to between the trading partners. All the same it takes a lot of effort to bring product in the market and to realize economic benefit. The social benefit shall override the social cost. Enlighten employment and high standard of living standard shall be our pride.
Posted on: Sun, 11 Aug 2013 18:29:00 +0000