KEPSA Urges Parliament to Revise Local Content Bill to Protect Investment

Kenya Private Sector Alliance (KEPSA) has called on Parliament to reconsider the proposed Local Content Bill, 2025, warning that strict rules could hurt investment, disrupt supply chains, and undermine the country’s competitiveness.

In a memorandum submitted to lawmakers, KEPSA said the Bill’s blanket requirement that foreign firms source at least 60 per cent of goods and services locally and hire 80 per cent Kenyan staff is unrealistic for many industries. “A one-size-fits-all rule is impractical,” the alliance said, adding that companies such as Coca-Cola could struggle to maintain product quality under such rules.

KEPSA recommended sector-specific localisation plans, where targets would be tailored to industries such as manufacturing, logistics, and financial services.

“These plans would be developed through consultations with industry players and rolled out gradually, with clear timelines and milestones,” the group said.

KEPSA on proprietary inputs

The lobby group also urged exemptions for proprietary inputs, including patented formulas, specialised ingredients, and technologies not produced locally. It proposed that goods from regional trade blocs like the East African Community (EAC) and COMESA be considered local and recommended a temporary waiver system for cases where inputs are unavailable or fail quality standards.

On agriculture, KEPSA opposed the Bill’s 100 per cent local sourcing requirement, citing seasonal variations, production gaps, and quality constraints. The group suggested a dynamic sourcing plan with crop-specific targets aligned to actual production capacity and market conditions, alongside investment in farmer training, storage, and value addition.

KEPSA also criticised the Bill’s heavy penalties, including fines of up to Sh100 million and possible jail terms for executives. The alliance called for a graduated penalty system and an independent Local Content Compliance Board to ensure fair enforcement.

While the government says the Bill will promote jobs and local industries, KEPSA warned that rigid rules could discourage foreign investment, weaken supply chains, and make Kenya less competitive in the region.