Influence of Communal Resource Extraction on Economic Development

Abstract

This research interrogates how communal resource extraction contributes to economic development. The study calls into question the conventional wisdom that resource abundance and extraction lead to development. Departing from previous studies which concentrated on state-led resource exploitation, it examined how communal exploitation of red-sand has impacted on employment, income levels and demand for local non-tradable goods in Laikipia North. It also assessed the regulatory framework that controls extraction, income redistribution and ecological impacts. The study also sought to identify the challenges and opportunities in balancing economic and ecological priorities in extraction of communal resources. Primary data was collected from randomly sampled households while participants in FGD and Key informant interviews were purposively sampled. Findings indicate failure of forward and backward economic linkages to generate development. Findings also point to existence of a gated enclave dominated by a class of the propertied, bureaucrats and local politicians who control extraction business through influence and ownership of construction companies. Further, the resource-exploiting agent has failed to offset ecological costs incurred in the run to satiate a growing demand for red-sand. Evidence suggests failure to channel resource rents into alternative income generating investments. It also shows missing infrastructural linkages with resource extraction. Lack of a coherent exploitation framework poses a challenge to harmonized economic development. The study finds the absolute scarcity of sand in the contiguous counties and its concentration in Laikipia North coupled with an assured market as a great opportunity which can be tapped to develop the sub-county.