By The Weekly Vision Reporter
Foreign companies operating in Kenya could soon be fined up to KSh 100 million and have their chief executives imprisoned if they fail to meet stringent new “Buy Kenyan, Hire Kenyan” rules, under a controversial bill tabled in the National Assembly.
The Local Content Bill 2025, sponsored by Laikipia Woman Representative Jane Kagiri, seeks to force foreign-owned firms to source at least 60 per cent of their goods and services from Kenyan companies and employ Kenyans for at least 80 per cent of their workforce. Chief executive officers who fail to ensure the 80 per cent Kenyan staffing threshold face a mandatory prison sentence of at least one year.
In an even stricter clause aimed at protecting the agricultural sector, any foreign company that uses agricultural produce as raw material for manufacturing will be required to source 100 per cent of those crops from Kenyan farmers, effectively banning imports of such inputs even when local supply is insufficient or more expensive.“The continued sourcing of goods and services externally by foreign companies has resulted in unfair business practices that have rendered local businesses uncompetitive,” Ms Kagiri said while presenting the Bill.
She accused foreign investors of repatriating profits while contributing little to job creation and accused some of tax evasion through transfer pricing. The legislation defines a “foreign company” as any firm incorporated outside Kenya or one in which the majority of shares and control are held by non-Kenyans.Existing contracts signed before the law comes into force will be grandfathered and allowed to run their full term, but all new investments and renewals will be subject to the new requirements.
Supporters of the Bill argue that Kenya has, for too long, allowed foreign firms to exploit its markets and resources while offering minimal benefits to citizens. They point to the European Union’s practice of giving preference to goods and services originating within the bloc as justification for similar protectionism at home.
The proposed law would apply to a wide range of sectors, including financial services, insurance, construction, transport, warehousing, logistics and security services. Foreign companies will also be obliged to provide technical training and capacity-building support to Kenyan suppliers to help them meet the required standards.
Youth unemployment, which officially stands at over 35 per cent for those aged 18–34, is repeatedly cited in the Bill as the primary motivation for the tough measures. If passed, the Local Content Bill 2025 would mark one of the most aggressive economic nationalist policies enacted in East Africa’s largest economy in recent decades, and is almost certain to spark fierce debate between proponents of protectionism and those warning of damaged investor confidence.
