A proposed legislative amendment in Kenya could usher in a new era of opportunities for local businesses. Kiambaa MP John Njuguna Wanjiku has introduced the Public Procurement and Asset Disposal (Amendment) Bill, 2023, which aims to redefine the rules governing public procurement, favoring Kenyan-owned companies for contracts valued below Sh1 billion.
The primary focus of the bill is to bring clarity to public procurement by setting strict parameters for foreign firms competing for contracts exceeding the Sh1 billion threshold. If the bill is enacted, foreign companies seeking such contracts will be required to enter into joint ventures with local firms, with at least 30 percent of the contract’s value allocated to the local partner.
The proposed legislation prioritizes transparency in these joint ventures. It stipulates that foreign procurement entities must outline the specific goods, works, and services that the local firm will handle in the joint venture arrangement.
To ensure the integrity of the procurement process, the bill introduces penalties for those found guilty of falsely registering companies on behalf of non-Kenyan entities. The penalties are set at a maximum of Sh5 million in fines or imprisonment for a term not exceeding three years, or both. Foreign individuals involved in such activities could face even stricter penalties, including fines not exceeding Sh5 million or imprisonment for a term not exceeding five years, or both.
Under the bill, a “local firm” is defined as one that is wholly owned by a Kenyan and fully incorporated within Kenya’s borders. Conversely, a “foreign firm” is characterized as a company with more than 30 percent ownership or complete ownership by non-Kenyan entities, whether incorporated inside or outside Kenya.
MP John Njuguna Wanjiku cited Section 217(2) of the South African Constitution as inspiration for the bill. This section addresses “contract allocation preferences” to support disadvantaged individuals or groups, serving as a model for a balanced preferential procurement system in Kenya.
Wanjiku highlighted the potential of this legislation to stimulate economic growth and inclusivity. He emphasized the bill’s capacity to create opportunities for marginalized groups, including women, youth, persons with disabilities, and other underserved populations. This, he argued, would lead to poverty reduction, enhanced social equity, and improved living standards for Kenyan citizens.
MP Wanjiku concluded by underlining the bill’s alignment with the long-term sustainability of the local business environment. It signifies a positive stride towards nurturing homegrown entrepreneurship and fostering economic growth.
As the bill progresses through the legislative process, it is viewed as a significant step towards reshaping the procurement landscape, offering promising prospects for Kenyan businesses and disadvantaged communities.
Photo Source: Google
By: Montel Kamau
Serrari Financial Analyst
7th September, 2023
Article and News Disclaimer
The information provided on www.serrarigroup.com is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
www.serrarigroup.com is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an "as-is" basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
In no event will www.serrarigroup.com be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.
The articles, news, and information presented on www.serrarigroup.com reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.
The content on www.serrarigroup.com may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, www.serrarigroup.com takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.
By using www.serrarigroup.com, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website.
www.serrarigroup.com, reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.
Serrari Group 2023
