Under a government-backed initiative aimed at protecting Kenyan companies from well-funded foreign competitors, all tenders valued below one billion shillings will be reserved for local firms, should proposed amendments to the Public Procurement and Asset Disposal Act of 2015, currently tabled in Parliament, be passed.
The proposal is designed to enhance the prospects of local businesses, which have increasingly struggled to compete with foreign firms, particularly Chinese companies, in securing tenders at both the national and county government levels.
“The principal object of the bill is to amend the Act to prescribe the threshold of procurements that shall be awarded to local firms,” the Public Procurement and Asset Disposal (Amendment) Bill, 2024 says.
Foreign firms shall be eligible for procurement of contracts of more than the value, where the foreign firm has entered into a joint venture procurement with a local firm for not less than 30 percent of the value of the value of the procurement.
Local contractors have increasingly voiced concerns over the influx of well-funded foreign firms which they say lock them out of projects, mainly in the roads and housing sectors.
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The proposed law sponsored by National Assembly Finance Committee chairman Kuria Kimani has been published for introduction in the National Assembly for first reading.
“Any procurement less than Sh1 billion shall be awarded to a local firm,” the Bill says.
The proposal stipulates that foreign firms will only be eligible for tenders exceeding Sh1 billion if they enter into a joint venture with a local company, with the local firm securing at least 30 percent of the procurement deal.
According to the Bill, the procuring entity will be required to specify the goods, works, and services to be carried out by the local firm as part of the joint venture arrangement.
