A new bill seeking to limit foreign firms from contracts below Sh1 billion will be introduced in Parliament soon. The bill sponsored by Mathira MP Rigathi Gachagua and approved by National Assembly Speaker Justin Muturi says the proposal is aimed at stopping the Chinese from doing jobs that can be done by Kenyans.
Addressing the press yesterday, he claimed most firms that are owned and managed by Chinese nationals have taken over the local supply businesses, depriving Kenyans of jobs.
The lawmaker argues that local businesses can no longer find markets for their products and now wants amendments introduced to the Public Procurement and Assets Disposal Act to cure the anomalies.
Gachagua explains that many foreign companies were taking advantage of the loopholes in the law to exploit local firms in the supply of goods and services into the local market.
The proposed legislation seeks to impose offences and financial sanctions or penalties against any accounting officer of a procuring entity who fails to comply with the provisions of the law.
Further, the law will introduce stiff offences against any local person who accepts to be used by foreigners to register companies on behalf of any foreigners in the pretext that the company is fully owned by locals.
In the bill he is also pushing for strict regulations on special circumstances in which contracts valued at less than Sh1 billion can be awarded to foreigners if Kenyan firms are unable to do the job.
“There is no way local companies can compete with the Chinese firms who acquire loans at three per cent in their home country, while local entrepreneurs acquire loans on 14 per cent interest,” the he said.
“What is annoying us is that once they get a contract the materials coming for the construction is procured from China, and they import it duty free,” adds the lawmaker.
Last week, some Central Kenya MPs raised concern over the influx of Chinese contractors in the country. The MP’s concerns echo those of traders who attended a forum on SMES last week in which they complained that the Chinese have taken up jobs that can be done by Kenyans.