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State to drop 30pc local stake rule

State to drop 30pc local stake rule
Moses Kuria when appeared before the National Assembly Committee on appointments for his vetting on Tuesday October 18, 2022. PHOTO/Courtesy.

The government plans to repeal the requirement that foreign investors cede 30 per cent of their companies to locals, Investments, Trade and Industry, Cabinet Secretary Moses Kuria has disclosed.
He said the move is necessary to increase the volume of foreign direct investment (FDI) flowing into the country.
“This policy/regulation of 30 per cent of FDI has to be locally-owned, we are going to abolish it. We can’t have SpaceX launching in Kenya and Kamau and Otieno are the partners. I have endeavoured as CS Trade to move FDI from the current $500 million to $10 billion,” the added. The current requirement was introduced in 2012 as part of the government’s efforts to promote local ownership and boost economic growth.

Economic growth
However, some investors have criticised the policy, saying it makes it more difficult for them to do business in Kenya.

Kuria argued that by removing the requirement, Kenya can become a more attractive destination for foreign investors, which will ultimately help to create more jobs and boost economic growth.

According to data from the United Nations Conference on Trade and Development (UNCTAD), Kenya’s FDI inflows have been volatile over the past decade. In 2010, FDI inflows to the country amounted to $828 million (Sh104.6 billion), but this figure dropped to just $496 million (Sh62.6 billion) in 2012, following introduction of the local ownership requirement.

Since then, FDI inflows have gradually increased, reaching a peak of $2.7 billion in 2016.

However, they have since declined, with inflows totaling $1.4 billion in 2019, before falling further to $1 billion in 2020 due to the Covid-19 pandemic.

Kenya has traditionally been an attractive destination for foreign investors due to its strategic location, strong private sector, and relatively stable political environment.

However, the country has faced challenges in recent years, including high levels of corruption, poor infrastructure, and a lack of skilled labor.
Kuria said that by removing the local ownership requirement, Kenya can become a more competitive destination for foreign direct investments.

The government plans to repeal the requirement that foreign investors cede 30 per cent of their companies to locals, Investments, Trade and Industry, Cabinet Secretary Moses Kuria has disclosed.

He said the move is necessary to increase the volume of foreign direct investment (FDI) flowing into the country.

“This policy/regulation of 30 per cent of FDI has to be locally-owned, we are going to abolish it. We can’t have SpaceX launching in Kenya and Kamau and Otieno are the partners. I have endeavoured as CS Trade to move FDI from the current $500 million to $10 billion,” the added.

The current requirement was introduced in 2012 as part of the government’s efforts to promote local ownership and boost economic growth.

Economic growth

However, some investors have criticised the policy, saying it makes it more difficult for them to do business in Kenya.

Kuria argued that by removing the requirement, Kenya can become a more attractive destination for foreign investors, which will ultimately help to create more jobs and boost economic growth.

According to data from the United Nations Conference on Trade and Development (UNCTAD), Kenya’s FDI inflows have been volatile over the past decade. In 2010, FDI inflows to the country amounted to $828 million (Sh104.6 billion), but this figure dropped to just $496 million (Sh62.6 billion) in 2012, following introduction of the local ownership requirement.

Since then, FDI inflows have gradually increased, reaching a peak of $2.7 billion in 2016.

However, they have since declined, with inflows totaling $1.4 billion in 2019, before falling further to $1 billion in 2020 due to the Covid-19 pandemic.

Kenya has traditionally been an attractive destination for foreign investors due to its strategic location, strong private sector, and relatively stable political environment.

However, the country has faced challenges in recent years, including high levels of corruption, poor infrastructure, and a lack of skilled labor.

Kuria said that by removing the local ownership requirement, Kenya can become a more competitive destination for foreign direct investments.

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