Boost for local enterprise

The MPs are spot on as far as this one is concerned. They have approved a plan to bar foreign firms from participating in some local tenders. While it is okay to give foreigners a chance to carry out some projects that require more funding and expertise, it should never be at the expense of local enterprise. Foreigners can bring in more resources, expertise and experience to deliver excellent work, but in the long run, building local capacity is crucial.

The National Assembly’s endorsement of the lawmakers’ bid to limit domination by foreign firms in the execution of tenders has moved it closer to being realised.

The Public Procurement and Asset Disposal (Amendment) Bill seeks to lock foreigners out of tenders valued at less than Sh1 billion. This should promote the growth of local industries and businesses. Also, foreign firms seeking contracts of more than Sh1 billion will be required to enter into joint ventures with locals for not less than 30 per cent of the value of the procurement.

The Public Procurement Regulatory Authority will monitor and ensure that local capacity is built. The Bill will now go to the Senate.

There is more potential benefit for Kenyans as the procurement of goods and services locally will be prioritised. This is logical. Even the developed countries do not deliberately disadvantage their own local enterprises.

To ensure sustainable local industries, the Bill provides for mandatory procurement of 40 per cent of local goods and services.

Under this Bill, a person who registers a company on behalf of a foreigner exhibiting unfair competition and seeks to benefit from the procurement commits an offence punishable by a fine not exceeding Sh5 million or three years in jail, or both.

Barring foreign firms from tenders of less than Sh1 billion is a sensible move that the Senate should endorse to boost local enterprises.