Kenya steps back from combative tech shareholding rule
Kenya is repealing a combative rule that required global tech multinationals to relinquish at least 30 percent of shareholding to locals.
The move comes after the Kenyan government agreed to remove the requirement from the national ICT policy guidelines.
Kenya had introduced a requirement that foreign companies such as Airtel, Google, Microsoft, and Amazon should have at least 30% shares held by local Kenyans.
Foreign ICT companies had three years from April 2021 to comply with the provision and meet the local equity ownership requirement by March of next year.
Nonetheless, this week the government made an about-turn on the contentious requirement for tech giants.
The ICT ministry invited public comments on the issue, highlighting the country wants to become a competitive knowledge-based economy by 2030.
The notice said: “For Kenya to be an attractive investment digital hub, it is proposed that the equity participation subsection (under section 6.2.4 on market rules) be deleted from the national ICT policy guidelines, 2020.
“Kenya has a vision to be a globally competitive knowledge-based economy by the year 2030. One of the government strategies to achieve the vision includes the development and promotion of the ICT sector to spur investments and create employment for Kenyans.”
President William Ruto's government has been ramping up efforts to grow the country’s ICT sector to increase productivity and competitiveness.
Last month, the largest economy in East Africa presented its budget for the 2023/2024 financial year, allocating $109.6 million (KES 15.1 billion) to fund initiatives in the ICT sector.
Kenya has been stepping up efforts to make the East African economic powerhouse an ICT innovation hub to unlock the digital economy potential.