The Kenyan government has retracted the National Information, Communications, and Technology (ICT) policy that requires a fraction of foreign entity’s ownership in exchange for license issuance. The Kenyan regulatory system mandates a minimal 30% ownership from foreign companies or individuals seeking its License to commerce ICT-inclined solutions.
Kenyan President William Ruto consented to make the digital economy progressive, unlike the biased equity clause that imposes a strict ICT license policy on startups. Although, the ICT policy was debuted to centralize the inland regulatory system in line with accessing the Kenyan marketplace on a regulated ICT infrastructure.
The retracted ICT policy might be labeled a biased equity clause participation because it protects local start-ups from bullish foreign investment in the Kenyan marketplace. Since the ICT policy’s enactment in 2019, the inland digital economy has created an optimal marketplace for local start-ups to thrive with adequate access to emerging technology.
The policy leveraged tech-related infrastructure development in Kenya. The policy mandated foreign tech companies to establish social amenities and ICT infrastructure for solutions in high-speed internet access, supporting data centers and machine learning, heightening ICT contributions and benefits to the economy, fostering an innovation ecosystem, and improving public service delivery.
“Licensees would have had three years to reach the local equity ownership requirement and could request a one-year extension from the Cabinet Secretary of ICT with good cause. The Capital Markets Authority’s regulations are considered to be followed by the equity participation requirements for listed businesses.”
The policy mandated foreign tech companies to bend their knee in allegiance with the Kenyan regulatory system on predetermined 30% equity ownership. The Kenyan digital policy has impacted the regional indulgence with tech partisans seeking licenses to promote operations in East Africa at large.
Despite the biased effect the ICT policy exhibit, the East African region remains the marketplace with the most investor seconded by Ghana, South Africa, and Nigeria. “The revised policy tried to level the playing field in the ICT sector by providing equity distribution which extends to local owners and co-owners and also ease the entry barrier.”
The policy only lasted through a four-year tenure in regulating foreign technology companies to give up a fraction of their stakes in exchange for the Kenyan license. This denotes that the Kenyan tech landscape wants more foreigners to commit to a seamless digital marketing rather than shy away.