Kenya will cap the number of foreigners in local subsidiaries of multinational firms at 20 percent of their total workforce in proposed legal changes that seek to protect jobs for locals.
The proposal is contained in the Local Content Bill, 2025, which if passed by Parliament will compel foreign firms to ensure that a minimum of 80 percent of the jobs, including the top management slots like CEO, are filled by Kenyans.
Currently, foreign firms based in Kenya are not legally required to reserve a specific percentage of jobs for Kenyans, even as the country grapples with a spiralling unemployment rate. Millions of Kenyans, particularly the youth, are unemployed and rely on casual work to survive.
‘A foreign company shall ensure that at least 80 percent of the workforce of the company are Kenyan citizens and comply with Article 41 of the Constitution on fair labour practices, including the right to fair remuneration of workers,’ the Bill which was tabled in Parliament on October 7, reads.
CEOs of the firms that breach this requirement will face a jail term of a year, while the companies risk fines of not less than Sh100 million.
According to official data, Kenya is struggling to create jobs, mainly to absorb the university and college graduates who exit higher education institutions every year. These struggles have been exacerbated by the closure of firms and a hiring freeze as companies navigate a tough economy.
The economy created a paltry 75,000 formal jobs last year compared to 122,900 a year earlier, based on data from the Kenya National Bureau of Statistics.
The high unemployment rate has worsened the lives of millions of Kenyans hit by the rising cost of living.
Most multinational companies based in the country have hired Kenyans, including for top management roles. Government policy currently discourages the employment of foreigners, except in roles for which there is a shortage of local talent.
The Bill represents a protectionist approach to ensure more direct wins for locals amid the significant presence of multinationals across a range of sectors.
Local materials
Besides the capping on foreign staff at multinationals, the Local Content Bill 2025 also seeks to make it compulsory for the firms to source at least 60 percent of their materials locally. For firms in agricultural sector, this figure is 100 percent.
‘A foreign company undertaking any business in Kenya which requires agricultural produce as raw materials for manufacture of goods, shall source all the agricultural produce from Kenyan farmers,’ the Bill reads.
The requirement on local sourcing of materials will apply to multinationals in the financial, insurance, construction, transport, logistics and warehousing sectors.