Tenders under Sh1 billion will be reserved for Kenyans, DP Gachagua says

Rigathi Gachagua

 Deputy President Rigathi Gachagua shaking hands with National Assembly Majority Leader Kimani Ichung’wa at Windsor hotel on December 5, 2022 .

Photo credit: Evans Habil | Nation Media Group

The government is pushing for a law change to cushion local investors against unfair competition from foreign firms by offering local businesses exclusive access to tenders worth up to Sh1 billion, Deputy President Rigathi Gachagua has said.

Mr Gachagua said the plan will also see local investors benefit from mega projects by ensuring that tenders above Sh1 billion are awarded to foreign firms under a joint venture with a local firm for at least 30 per cent of the procurement value.

Addressing Kenya Kwanza MPs during the National Assembly Majority conference at Windsor Golf Hotel yesterday, the DP said the move seeks to protect Kenyan businesses from unfair foreign competition in procurement and tendering.

He directed National Assembly Majority Leader Kimani Ichung’wa to revive the Procurement (Amendment) Bill, 2018, which he initially sponsored as a private Bill but which was shot down in the National Assembly.

“In 2018, I sponsored the Procurement (Amendment) Bill, 2018, where I wanted to cushion our local contractors from foreigners. We had proposed that we have businesses up to Sh1 billion reserved for Kenyans and anything above Sh1 billion, we have a joint venture with the local people taking a local content of 30 per cent,” said the DP.

He said the Bill was defeated in Parliament by allies of President Uhuru Kenyatta and Opposition leader Raila Odinga.

In what could spark a diplomatic tiff, the Deputy President claimed that some Chinese in Kenya are carrying out small businesses, threatening their local competitors.  

“The situation we have now where the Chinese are roasting maize in town and repairing punctures — they can really get our people out of business. So I'll be asking my friend Kimani (majority leader) to consider whether we can push that Bill through alongside others,” Mr Gachagua said.

There have been concerns about foreigners working on mega projects and repatriating profits to their home countries, leaving Kenya with a big gap in cash flow even when the country has massive infrastructural investments.

Mr Gachagua had initially stated that to curb corruption and possible misuse of the amendment arising, the Bill proposed stringent penalties on individuals who might be tempted to register a business on behalf of non-Kenyans — a fine not exceeding Sh5 million or three years imprisonment, or both — upon conviction.

Yesterday, the DP revealed that many legislative proposals had been lined up by government to support the Kenya Kwanza plan.

“We must now align our laws and other regulations to the implementation of the Kenya Kwanza plan. We have identified affordable housing as a key function to make sure that we deal with the rural-urban migration and at the same time create employment for our young people,” he said.

Yesterday’s meeting with MPs was meant for housekeeping ahead of the December recess, he explained.

Universal health coverage

“There shall be a special sitting before you go for recess so you will have to create time and come and prosecute that agenda to enable business of government to move on, even as you head to recess to deal with matters that cannot wait for January.”

“On universal health coverage, we will be seeking your support on the floor of the House when you must put the necessary laws in place for its implementation. We also have the digital super highway as a creative economy, again we will require your support.”

“So your hands are full in terms of what you need to do to support the Kenya Kwanza plan, which is the platform on what we were elected,” added the DP.

He urged the lawmakers to be ambassadors for the Hustler Fund, which was launched last week.

“Already more than nine million people, as of this morning (yesterday), have registered for the Hustler Fund. Another 3.7 million people have already borrowed the money to the tune of Sh2.8 billion and what is very encouraging is that already Sh124 million has been paid back,” the DP said.

“It means that the concept has been well received and people are borrowing and paying and we request you to be our ambassadors to explain to the traders and to the informal sector players that this is a good fund.”