Kenya abandons local shareholding ruling for tech groups

Kenya abandons local shareholding ruling for tech groups

Citing the need for Kenya to be an attractive investment digital hub, Kenya is repealing a ruling that would have made meant only companies with at least 30% substantive Kenyan ownership, either corporate or individual, would be licensed to provide ICT services.

The move would have affected foreign companies such as Airtel, Google, Microsoft and Amazon; the requirement has now been removed from the national ICT policy guidelines.

The threat of what news resource ITWeb Africa calls a ‘combative rule’ has been hanging over these companies for some while. They had been given three years from April 2021 to comply with the provision and meet the local equity ownership requirement by March of next year.

In fact, as local press reports indicate, the change of policy was flagged up in late March when President William Ruto decided to drop the foreign ownership rules after reported lobbying from US tech giant Amazon, which apparently highlighted the review of the rule as a prerequisite to setting up shop in the country. It is unlikely it would have been the only multinational to threaten to rethink its plans.

That said, Airtel Africa, already a big player in Kenya, had said it was ready to list its Kenyan operations on the Nairobi Securities Exchange (NSE) if the government retained the condition on local ownership as part of licensing requirements.

The government notice, quoted by ITWeb Africa, said: “For Kenya to be an attractive investment digital hub, it is proposed that the equity participation subsection…be deleted from the national ICT policy guidelines, 2020.”

In a reference to Kenya Vision 2030, a long-term development blueprint for the country, the government notice continues: “Kenya has a vision to be a globally competitive knowledge-based economy by the year 2030. One of the government strategies to achieve the vision includes the development and promotion of the ICT sector to spur investments and create employment for Kenyans.”


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