Kenya’s Ministry of Information, Communications, and Technology has proposed the removal of the 30% local shareholding requirement for foreign ICT companies.
The National ICT Policy Guidelines, 2020, gazetted under Section 5(4) of the Kenya Information and Communications Act (KICA) (No.2 of 1998), currently require all licensees to comply with the 30% local shareholding provisions within a 3-year grace period.
The proposal to delete the equity participation subsection under Section 6.2.4 on Market Rules from the National ICT Policy Guidelines, 2020, is part of the government’s strategy to develop and promote the ICT sector in order to spur investments and create employment for Kenyans.
The goal is to make Kenya a globally competitive knowledge-based economy by the year 2030 and an attractive investment digital hub.
“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,” the ICT ministry stated on Tuesday.
“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.”
As a result, the Ministry is inviting stakeholders, members of the public, and all interested parties to provide suggestions, views, and inputs on the proposed removal of the 30% local shareholding requirement for foreign ICT companies.
In 2006, companies providing broadcasting and telecommunication services were required to have 30% equity participation.
In 2008, this requirement was reduced to 20% for firms providing communication services, while the 30% requirement was retained for broadcasting companies. The Cabinet Secretary had the power to grant a waiver in exceptional cases.
In 2020, the Kenyan equity participation requirement was increased from 20% to 30% for all licensed companies in the ICT sector.
Companies licensed to provide broadcasting services were still required to comply with the 30% local equity requirement. The Policy required licensees to comply with the new local equity participation requirements within three years.
However, it was unclear when the three-year period would commence, as there were existing licensees with waivers or under the previous grace period for compliance.