Foreign companies operating in Kenya could face fines of at least Ksh100 million and prison terms for their CEOs under the proposed Local Content Bill 2025, sponsored by Laikipia Women Representative Jane Kagiri. The bill, which has passed the National Assembly, is now awaiting the President’s assent.
The legislation aims to boost local industry by ensuring foreign companies prioritize Kenyan goods, services, and labor. Under the law, foreign companies must source a minimum of 60% of their goods and services from local suppliers that meet required standards. Additionally, those using agricultural produce as raw materials will be required to source exclusively from Kenyan farmers, strengthening the agricultural sector, a key part of the national economy.
The bill also focuses on employment, mandating that at least 80% of a foreign company’s workforce must be Kenyan citizens. It further emphasizes the inclusion of qualified Kenyans in management and leadership roles, promoting skill development and fair employment practices.
“Promote the use of a locally available workforce; enhance benefits from the supply chain; address transfer pricing; and align with international standards, such as the EU, which prioritizes locally sourced goods and services,” the bill states.
Companies found in violation will face hefty penalties. CEOs of offending companies risk at least one year in prison, while the companies themselves could be fined Ksh100 million or more.
The law targets sectors including financial services, insurance, construction, transport, warehousing, logistics, and security, as determined by the Cabinet Secretary for Trade. Regulations to implement the law, including standards for goods and services, will also be set by the ministry.
Kagiri emphasized that the bill seeks to protect local industries from unfair competition, noting that foreign investments have had limited positive impact, with profits repatriated abroad and local unemployment persisting.
The Local Content Bill 2025 is seen as a major step towards strengthening Kenya’s economy, creating more jobs for Kenyans, and ensuring that foreign investments benefit the country’s growth.
