New Bill targets foreign companies to purchase 60pc of inputs locally
National
By
Jacinta Mutura
| Apr 09, 2026
Foreign companies operating in Kenya could soon be compelled to source at least 60 per cent of their goods and services locally or face fines of up to Sh100 million and possible jail terms for top leaders if a new Bill is approved into law.
The Local Content Bill, 2025, sponsored by Laikipia Woman Representative Jane Kagiri seeks to prioritise Kenyan businesses, workers and farmers by imposing strict measures on procurement and employment.
The Bill proposes that foreign companies should procure at least 60 per cent of its goods and services from local sources where goods and services meet the relevant prescribed standards.
The proposed law cuts across all foreign companies in key sectors including finance, insurance, construction, transport, logistics and private security.
To further protect local industries and farmers, the Bill proposes that multinational companies that rely on agricultural raw materials for manufacture of goods will be required to source entire agricultural produce from Kenyan farmers.
“As it is presently, foreign companies import agricultural supplies from foreign countries despite there being adequate supply of agricultural produce in Kenya,” reads the Bill.
Kagiri stated that the Bill also seeks to promote the use of locally manufactured goods and services from local companies such as transport services and reduce tax evasion.
“It seeks to promote the employment of locally available workforce and maximise the benefits derived from domestic supply chains, strengthening the overall economy.”
The Bill further seeks to address concerns where expatriates occupy positions for which qualified Kenyans are available.
It requires that at least 80 per cent of employees at all levels shall be Kenyan citizens emphasising that roles which can be competently undertaken by Kenyans should prioritise local professionals, while still allowing specialised foreign expertise where necessary.
“A foreign company domiciled and operating in Kenya, shall employ qualified and skilled Kenyan citizens in the management and all levels of the organisation of the company,” reads the Bill.
In addition, multinationals would be legally compelled to hand over skills and expertise to local firms by investing in technical and other capacity building support to local companies to ensure compliance with the relevant prescribed standards.
The proposal is aimed at ensuring Kenyans benefit from skills and knowledge often reserved in foreign firms.
Any company that fails to comply, the Bill proposes a fine of not less than Sh100 million while responsible officers including chief executive shall face imprisonment for a term not less than one year.
The MP indicates lack of laws on local content has subdued the growth of the local industry in key economic sectors as companies incorporated outside Kenya procure their goods, supplies and workforce from other foreign companies.
“This has resulted in unfair business practices that have rendered the local business uncompetitive.
‘‘Additionally, the investments by foreign companies in Kenya have had minimal positive economic effect to the country due to profit repatriation,” Kagiri argued.
She noted that a legal framework would address the persistent challenge of youth unemployment by creating job opportunities.
The Bill is currently before the Committee on Trade, Industry and Cooperatives that is receiving memoranda from the public and stakeholders before it proceeds to a second reading.