Kenya’s proposed changes to the Public Finance Management Act could limit foreign firms to labor-only services and barn them from government bids below Sh5 billion. The amendment seeks to protect local contractors who have faced challenges competing against foreign companies for smaller projects.
There have been concerns that foreign businesses, particularly Chinese owned businesses, have won contracts that are legally available to Kenyan businesses, with some of them even building bridges for as little as Sh100 million.
Foreign enterprises in Kenya will now be barred from participating in government bids worth less than Sh5 billion and will be limited to providing only labor services.
Mbeere North Member of Parliament, Geoffrey Ruku, said the principle act is amended by including that the exclusive preference threshold for citizen contractors which will be Sh5 billion for procurement in respect of works goods and services.
In the amendment, Ruku suggests that all readily accessible or easily acquired building materials and other inputs be restricted to Kenya, with foreign contractors limited to labor-only contracts.
The MPs said that the action is intended to protect local contractors who have been marginalized and are now vying for the few positions that are still open in the ministries and counties.
According to the Star, Kenyan news publication, this is one of the new modifications proposed by MPs to the Public Finance Management Act. If the changes are approved, the maximum for foreign corporations bidding on taxpayer-funded projects would be raised from Sh500 million to Sh5 billion.