The National Assembly Finance and National Planning Committee has begun examining two proposed laws seeking to tighten rules on foreign exchange handling and introduce stronger safeguards before public procurement contracts can be terminated.
The proposals, sponsored by Rongo MP Paul Abuor, are still at the pre-publication stage and will only move to the next stage if the Committee approves them.
One of the proposals, the Central Bank of Kenya (Amendment) Bill, 2026, seeks changes to the CBK Act to define the handling of foreign exchange, create offences linked to illegal dealing in foreign currency and support stability in the foreign exchange market.
The second proposal, the Public Procurement and Asset Disposal Act (Amendment) Bill, 2025, seeks to improve accountability and fairness when public bodies decide to end procurement contracts.
Under the proposed changes, the Attorney General, heads of legal services in Parliament and the Judiciary, as well as county attorneys, would have to confirm that contractors and suppliers had been given proper notice and an opportunity to be heard before their contracts are terminated.
Presenting the proposals before the Committee, Abuor said research had pointed to a rising practice in which individuals and companies allegedly keep large amounts of foreign currency for speculative purposes, especially as general elections approach.
“Hon. Chair, it is important to have a law in place which regulates the handling of foreign exchange to ensure that individuals or corporate entities do not hoard forex for speculation or other reasons, creating liquidity challenges in the country”, he stated.
Abuor said people should continue to have the right to hold foreign currency but argued that the law should also impose penalties where money is deliberately kept out of circulation in a way that affects the economy.
The proposal, however, drew questions from Committee members, who sought to understand the reason for bringing back foreign exchange controls after similar provisions had previously been removed from Kenyan law.
“This proposed law used to be a part of our laws a while back, but got abolished to allow the laws of demand and supply in economics to operate. What is your motivation to have it enacted once again?”, David Mboni asked.
Abuor responded that the holding of foreign currency for speculative purposes, particularly around election periods, could lead to artificial shortages and push up the cost of foreign exchange.
The second Bill before the Committee focuses on the termination of public procurement contracts.
Abuor said the proposed amendments were meant to address cases where public institutions cancel contracts without first allowing contractors an opportunity to respond to the issues raised against them.
“Hon. Members, this proposed legislation is aimed at promoting the principles of natural justice, aligning with constitutional requirements for fair administrative action and mitigating disputes arising from termination of contracts”, he held.
Committee Chairperson Kuria Kimani questioned whether some of the concerns raised by Abuor had already been addressed through the government's electronic procurement system.
“Now that we have e-procurement system rolled out by the government, haven’t your fears been taken care of? ”Kimani asked.
Kimani also noted that the Public Procurement and Asset Disposal Regulations, 2020, already contain several safeguards on the process of terminating procurement contracts.
Committee members further raised concerns over how the proposed changes would apply to county governments, noting that many contract termination disputes arise at the devolved level.
Abuor clarified that the proposed law would apply to all procurement activities funded through the Consolidated Fund, including procurement undertaken by county governments.
The two proposals will remain under consideration at the Committee as members assess their purpose, scope and possible overlap with existing laws and regulations before deciding whether they should proceed to publication.