[kictanet] Day 4 of 10- BPO Discussions, Govt Subsidies

[Luvisia Bakuli]

<<Qtn6:  What incentives / subsidies should the government provide to
BPO operators?  What of the clause requiring 20% Local shareholding in
foreign companies - is it prohibitive or helpful?>>

There is need for incentives to match the positive externalities the
firms bring to the country and in the communities they are located. For
example, incentives may be designed to attract certain technologies, job
skills, or development of specific capabilities. For these areas, in
addition to tax incentives, one may consider provision of resources such
as land, buildings, water, energy, even bandwidth at a concession to
attract businesses in economically distressed areas -- i.e. away from
Nairobi.

But there needs to be a clear stipulation of when a firm is deemed to
graduate to the next level and start paying full fees. That should also
signal for removal of non-compete clauses, i.e. allow competition in the
sub-sector if any were imposed as an incentive.

Bakuli