Complexities of Local Content in Kenya’s Extractive Sector: An Appraisal of Policy, Legal and Institutional Frameworks and Practice

The debate on local content has taken center stage since the discovery of commercial quantities of oil in 2012 by Tullow Oil that could generate up to $1.2 billion in revenue for the Kenyan government. This chapter follows the evolution of local content development in Kenya’s extractive sector, describing the existing legal, institutional and policy frameworks promoting local content in the industry. Defining the ‘local’ in local content has been a major source of conflict in the Kenyan context. From the existing legislation, it is apparent that ‘local’ is synonymous with ‘national content,’ meaning that inputs and skills can be sourced from anywhere in the host country as opposed to local sourcing from the resource rich regions. Development of favorable policies and legislation in the recent past have embolden the industry though it is not clear that they would automatically resolve these issues and address other glaring gaps. The chapter concludes that there is a need to prioritize the development of an overarching Local Content Development Policy in Kenya that will define the focus of local content, which should be based on the country’s priorities, needs, and specific contexts. It should also address the question of ‘community content’ verses ‘local content.’ The policy would take into consideration the actual state of local industry, noting that local content development is a long-term goal that needs to be phased to adapt to the demands of each stage of development of the resources.