Kenya: Foreign firms to cede 30 per cent stake under to new law

Kenya's National Information Communications and Technology Policy Guidelines have mandated that firms looking to operate in the country's ICT sector must relinquish 30% of their ownership to local Kenyans under the newly published legislation. The update to the national ICT policy, which had not been revised since 2006, aims to align with the current constitution, government goals, and technological landscape. In an exclusive interview with CNBC Africa, Kenyan-based venture capitalist Duncan Karani sheds light on the significance of this policy change. Karani praises the government's proactive approach, led by Cabinet Secretary Tomo Sheru and the Minister of ICT, in driving innovation and economic growth in Kenya. He emphasizes that the government has historically prioritized innovation over regulation, spurring conversations and excitement within the industry. While some uncertainty remains regarding the policy guidelines, stakeholders are hopeful that further clarity will emerge in due time. The move is seen as a timely and strategic step by the Kenyan government to propel the country towards technological advancement and economic prosperity. Karani acknowledges the ICT sector as a vital contributor to Kenya's GDP, noting that the goal is for the industry to contribute up to 10% to the country's GDP in the future. The sector has already made significant strides in job creation, attracting youth and seasoned professionals alike to explore opportunities in technology and entrepreneurship. Karani dismisses the notion that the policy change is solely a response to foreign entities dominating the market, pointing out that the legislation also aims to bolster access to capital and support the local startup ecosystem. The government is committed to reducing barriers for all businesses, local and foreign, through initiatives like establishing an ICT co-fund and providing venture capital support. While the policy marks a positive direction for the ICT sector, Karani cautions that the execution of these plans will be critical. He highlights challenges such as access to capital, capacity building, and skills development as areas needing further attention. Karani urges collaboration between the government and private sector to ensure the long-term success of the policy. He emphasizes the importance of private sector involvement in complementing the government's efforts and driving sustained growth in the ICT industry. As Kenya navigates these policy changes, the spotlight is on the execution and collaboration between stakeholders to realize the full potential of the updated ICT policy.