Joho Moves to End Royalty Deadlock with New Fast-Track Mining Regulations
Ali Hassan Joho says regulations sent to Parliament will accelerate county and community payments, but questions remain over scale, implementation and sector capacity.
By Chemtai Kirui | Nairobi | 25 February 2026
The Mining Ministry has submitted draft mining regulations to Parliament that it says will speed up payments to counties and host communities from mineral royalties, reopening a long-running debate over whether the country’s modest mining sector can meaningfully support devolved finances.
Cabinet Secretary for Mining and Blue Economy Ali Hassan Joho told county officials in Tharaka-Nithi that the proposed rules would operationalise revenue sharing under the Mining Act and allow royalty proceeds to be disbursed more promptly once production and payments are recorded.
“The ministry has forwarded regulations to Parliament that allow it to give proceeds to county governments and communities their share immediately when an interested company gets their licences,” Joho said.
The legal formula itself is not new. Section 183 of the 2016 Act prescribes that mineral royalties be split 70% to the national government, 20% to county governments and 10% to host communities. What has been missing for nearly a decade is a clear, enforceable disbursement mechanism.
Treasury officials say the draft framework introduces a defined transfer process through a County Mineral Royalties Account, including a 14-day window requiring the National Treasury to remit the 30% county and community share to respective County Revenue Funds once it receives a certified schedule from the mining ministry.
Analysts say that provision, if implemented , would be a significant operational shift, preventing the practice of holding royalty funds in the consolidated fund until late in the fiscal year.
Royalty collections have been lower and more intermittent than early expectations when the law was passed. Treasury disclosures in late 2025 indicated that about KSh2.9 billion in mineral royalties had accumulated in the consolidated fund over the past decade, reflecting both limited large-scale production and administrative bottlenecks in disbursement.
Implementation has also been shaped by policy decisions. In December 2019, the government imposed a moratorium on new mining licences as it reviewed compliance, licensing procedures and historical allocations. The freeze, only partially lifted in October 2023, effectively slowed new project approvals and royalty growth, delaying the practical rollout of the 2016 revenue-sharing provisions.
“The ministry is in possession of key data from across the country that shows the presence of precious metals in different parts,” Joho said. “Our geophysical surveys have identified promising deposits of copper, iron ore, and rare earth elements.”
Joho, speaking at a sensitisation forum, cited preliminary estimates that a gold project in Ikolomani, Kakamega, could generate as much as KES 774B ($6 billion) in gross value, arguing that communities entitled to a 1% share could see transformative inflows.
“Counties have mineral potential to change the country,” he said.
Technical filings paint a more cautious picture. Environmental and Social Impact Assessment documents submitted to the National Environment Management Authority value the confirmed resource at roughly $5.29 billion based on 1.27 million ounces, illustrating the difference between headline gross-value estimates and resource-based technical valuations.
Gross in-ground value does not translate directly into royalties; recoverable reserves, production costs, gold prices, taxes and operating margins all determine the eventual fiscal take.
The Ikolomani project also reflects the social and operational challenges facing the mining sector. In December 2025, protests linked to land and compensation disputes turned violent, leaving four people dead and several injured. ESIA documentation indicates that nearly 800 households could require resettlement if the project proceeds at scale — a process that will test the credibility of any promised community benefit structure.
Mining remains a small contributor to Kenya’s overall economy. Kenya National Bureau of Statistics (KNBS) Economic Survey 2024 statistics show the sector accounts for well under 1% of GDP, with activity dominated by artisanal and small-scale operations rather than large producing mines.
While exploration activity has expanded in recent years, commercial output remains limited compared to agriculture, manufacturing and services.
The artisanal segment presents its own governance challenges. Research in western Kenya’s gold belts suggests women account for roughly 38% of the artisanal mining workforce but receive an estimated 11% of revenue share, highlighting structural inequities that could complicate implementation of the 10% community allocation if local governance structures lack transparency.
County leaders have long argued that delays in royalty transfers have weakened public trust.
“The key concern has always been how local communities benefit legally from what is found beneath their soil without exploitation,” said Tharaka Nithi governor Muthomi Njuki, who is also the Council of Governor’s vice chairperson.
Governors say communities see mineral trucks leaving their regions but little tangible local investment. The proposed 14-day transfer rule is therefore being watched as a litmus test of whether Nairobi is willing to institutionalise automatic disbursement rather than discretionary release.
The central fiscal question is one of scale. Even if the full KSh2.9 billion accumulated over a decade were distributed strictly under the 70-20-10 formula, county receipts would remain modest relative to annual budgets that often exceed KSh10 billion. Sustained revenue growth would require multiple producing mines operating profitably over extended periods.
Industry observers say the draft regulations could improve transparency if they clearly define valuation procedures, publication of royalty schedules and oversight by county assemblies. But they caution that administrative reform alone cannot compensate for limited production volumes.
The proposal effectively reopens a sector that has been under regulatory pause for years. Whether it becomes a fiscal turning point for counties will depend on commercial output and the state’s ability to enforce timely, rule-based transfers.
