The National ICT Policy 2019 was made into law in August 2020.
The law was developed to facilitate universal access to ICT infrastructure and services in Kenya.
The Policy’s driving force is to realize the potential of Kenya’s digital economy by creating an enabling environment for all citizens and stakeholders.
It should also be remembered that the Policy was first reviewed in 2006, following unprecedented growth in the ICT space in Kenya.
The re-assessment of the policy sought to include key elements that matched global trends and fast-changing public needs.
We scrutinized the Policy for additional insights, and noted that it had laid out the manner at which non-Kenya ICT companies would organize their ownership prior to being licensed.
The clause is named Equity Participation, and states as follows:
The government strongly encourages Kenyans to participate in the ICT and Science & Technology sector through equity participation.
It is the policy that only companies with at least 30% substantive Kenyan ownership, either corporate or individual will be licensed to provide ICT services.
We had our two cents about the clause, which you can refer to here.
In the spirit to make the matter clearer, the ICT CS has shed more light into the matter, mainly about the manner how foreign ICT companies should present their shareholding.
The CS’s statement was published in the Kenya Gazette dated April 9, 2021.
The statement maintains that it is the policy that only companies with at least 30% substantive Kenyan ownership, either corporate or individual, be licensed to offer ICT services.
Here are more highlights from the statement:
- An existing company with less than 20% local equity ownership and has not completed its 3-year grace period will be required to meet the 30% local ownership at the end of the grace period.
- An existing company that had not met the 20% local equity ownership prior to the signing of the Policy (August 7, 2020) will have two years to meet the 30% local shareholding with effect from the said date.
- An existing company that had a waiver granted under the ICT Sector Policy Guidelines of 2006 will have 3 years to meet the 30% local shareholding effective from the date of the notice (April 9, 2021).
- New foreign companies will have 3 years to meet the 30% local equity threshold from the date of license issuance.
- A company registered to exclusively offer Business Process Outsourcing (BPO) Service is not subject to the Policy.
Lastly, companies may apply to the office of the ICT CS for extensions.