Parliament is seeking to raise bar for foreign firms seeking to conduct business in Kenya with a raft of proposals to amend the Public Procurement and Asset Disposal Act.
- A foreigner who registers a company by misrepresenting himself or herself as being Kenyan for instance risks a Ksh 5 million fine or imprisonment.
- The National Assembly is also seeking to block Kenyans from registering a company on behalf of a foreigner.
- The proposed amendments also seek to block foreign companies from accessing tenders of less than KSh 1 billion, which will only be awarded to local firm.
“A person who registers a company on behalf of a foreigner exhibiting unfair competition and seeks to benefit from the procurement commits an offence and shall be liable, upon conviction, to a fine not exceeding Ksh5 million, or to a term of imprisonment not exceeding three years, or to both,” reads the Public Procurement and Asset Disposal (Amendment) Bill, 2024.
“A foreigner who registers a company through misrepresentation as being Kenyan and seeks to benefit from procurement is also committing offense,” according the Bill.
Only foreign firms in joint ventures with local firms will be eligible for procurement of contracts of more than Ksh1 billion. “Where a procurement is of a value exceeding Ksh1 billion, in addition to the requirements set out, a procuring entity shall set out specific goods, works and services to be undertaken by a local firm under joint venture procurement,” the bill states.
GrayLists and Sourcing
The bill is also making it difficult for firms or individuals blocked from conducting businesses in other territories to open shop in Kenya. Recognising the role of international agency, it says a person or a firm debarred by a global agency shall be deemed to have been debarred in Kenya as if the debarment procedure and proceedings were conducted in Kenya, “…for a specified period of time not exceeding ten years.”
“A successful tenderer who is a citizen contractor, shall not subcontract a foreign company unless the knowledge, skill, good or service is not available in the country,” the bill adds.
The bill, which was received by the National Assembly’s Director of Legal Services on 6 November 2024, also has some requirements on how the foreign tenderers should source supplies. It offers that at least 40 percent of all goods and services by procuring entities should be obtained from local sources, with a Cabinet Secretary ensuring compliance quarterly.
