Local content is key to achieving Kenya’s economic growth goals
Kenya’s economy is lagging due to the flight of cash to foreign countries and entrepreneurs. This is despite the fact that the same cash was generated in Kenya and, in most cases, paid through the Kenyan taxpayer. The technology and expertise gap between foreign and local entrepreneurs has also been quite large.
This state of affairs has created the need to promote local content to support local Kenyan industries and citizen entrepreneurs.
It is for this reason that we now have local content provisions in the Public Procurement and Disposal Act 2015, National Building Authority Act 2011 and subsequent regulations 2014 on the national building authority.
The 2014 NCA Regulations, for example, provide that an application from a foreign contractor must be accompanied by a written commitment that it will subcontract or enter into a joint venture with a local person or firm for at least 30% of the value of the contract for which temporary registration is requested and that it is to transfer technical skills not available locally to a local person or firm in such manner as the authority may determine from time to time.
There is no doubt that the effective implementation of local content provisions will help build capacity and provide a lifeline for citizen entrepreneurs and suppliers.
The provisions will also facilitate, bring back and retain much-needed hitherto untapped skills and technology transfer and give local players a share of lucrative and costly infrastructure projects, making them attractive for future project funding and future.
This cherry was previously the preserve of foreign entrepreneurs from Japan, India, Germany, Dubai and now China who enjoy the benefits of cheap credit and financing from financial institutions and companies. development finance agencies and companies in their country of incorporation.
However, local content should not be favored where skills and expertise do not exist and also to the detriment of quality infrastructure. There is also a need to ensure competition and avoid undermining Kenya’s bilateral, regional and global trade treaty commitments.