Kenyan MP seeks foreign firm cap
Legislator proposes firms be prevented from bidding on contracts valued at up to 1-billion shillings amid ‘Chinese invasion outcry’
A legislator from Kenya’s governing party has proposed limiting foreign involvement in public contracts after what he said was an outcry about an influx of Chinese businesses driving out local companies.
China has become Kenya’s biggest trading partner, accounting for 17% of the annual trade by value, or more than $4bn, heavily tilted in China’s favour.
That imbalance, together with growing Kenyan borrowing from China, which is estimated at 21% of Kenya’s total public debt of 2.51-trillion shillings ($24.67bn), has started to ruffle feathers among Kenyans. A recent wave of Chinese investments in the country’s real estate, retail and road construction sectors has added to the unease.
“The hue and cry has been brought about by what I call the Chinese invasion,” Rigathi Gachagua, an MP from central Kenya, told Reuters by phone. He is proposing amendments to the Public Procurement and Asset Disposal Act of 2015, to prevent foreign companies from bidding for any contract valued at up to 1-billion shillings.
Gachagua said the proposal is going through the legislative process and he aims to bring it to parliament for debate in early 2019. The proposal has already garnered widespread support in the governing Jubilee party and other parties, he said.
Spokespeople for Jubilee and Kenya’s trade ministry did not immediately return calls and emails requesting comment.
The government issued a notice in late October to ban tilapia fish imports from 2019, a move widely interpreted as targeting China, a major source of tilapia imports to Kenya.
China’s embassy in Nairobi declined to comment on Gachagua’s initiative but said it hopes the issue of fish imports will be resolved amicably for the sake of the broader ties between the two nations.
“As a strategic partner of Kenya, China will not be engaged in a trade war with Kenya, or even associate the issue of fish import with other co-operative projects,” the embassy said in a statement.
Like other African nations, Kenya has turned to China over the past few years for funds, technology and equipment to develop its infrastructure, including its biggest project since independence: a $3.2bn railway linking Mombasa to Nairobi, which was opened in 2017. The growing reliance on Chinese finance has caused anger among many Kenyans, with critics saying it places an unbearable debt burden on future generations.
Gachagua said that China is using its position as a lender to give its companies an unfair advantage over their local counterparts when it comes to competing for contracts.
“They have taken all the businesses and they are also buying all the goods from China,” he said.
KENYAN BORROWING FROM CHINA, WHICH IS ESTIMATED AT 21% OF KENYA’S TOTAL PUBLIC DEBT, HAS STARTED TO RUFFLE FEATHERS