The EU–Kenya EPA includes an annex (Annex V) referencing trade and sustainable development. While the annex is binding under Article 147 of the main text, it does not contain sanction-based provisions and thus cannot be considered fully enforceable. It includes references to labour standards, climate change, biodiversity and gender equality, including a commitment not to lower labour or environmental standards to attract trade or investment.16 The US–Kenya STIP17 aims to promote worker rights and protections through commitments on labour law enforcement, social dialogue and addressing forced labour in global supply chains, while also supporting inclusive participation in trade by women, young people and vulnerable groups. The AfCFTA Investment Protocol requires investors to respect core labour standards,18 but does not make reference to labour rights or working conditions. The current version of the Protocol on Investment to the AfCFTA of January 2023, however, includes State commitments relating to labour standards and a prohibition on weakening such standards to attract investment. It also requires investors to comply with certain labour standards through a chapter on “investor obligations” and exempts regulatory action to protect labour rights from the scope of the provisions regarding indirect expropriation.19 The East African Community (EAC) has made progress on regional digital integration – including the Common Higher Education Area (CHEA) for talent mobility – but labour protections remain fragmented. Efforts to align digital trade policies with labour standards in the EAC could help address concerns such as wage competition, fragmented regulation and labour arbitrage across borders. Stakeholders such as the Central Organization of Trade Unions, Kenya (COTU) and the Kenya Private Sector Alliance (KEPSA) have emphasized the need for a regional framework to ensure ethical and sustainable gig work throughout the EAC. Most digital economy agreements also omit labour provisions. An exception is the 2022 UK–Singapore Digital Economy Agreement.20 Article 8.61-P of the agreement commits both parties to “adopting or maintaining labour policies that promote decent conditions of work for workers who are engaged in or support the digital economy”. It also provides for cooperation to promote digital inclusion for groups facing barriers, such as women, young people and informal workers. Further, the agreement covers data portability, algorithmic transparency and ethical AI – important for platform fairness. Several stakeholders emphasized the role of mutual recognition agreements (MRAs) and professional mobility protocols in enabling Kenyan freelancers and business process outsourcing (BPO) workers to access regional and global markets. The EAC and AfCFTA can provide the scaffolding for this, but such mechanisms must be designed with worker protections, not just employer flexibility, in mind. From cloud computing to fintech and BPO, Kenya has positioned itself as a regional tech hub. In April 2024, the government removed its 30% local ownership requirement for ICT companies to attract greater foreign direct investment and enhance competitiveness in the sector.21 Microsoft and G42 launched a $1 billion initiative in cloud infrastructure, AI and training;22 Google has invested in AI and developer training;23 and Huawei has supported university labs and bootcamps.24 While these initiatives expand access, stakeholders cited persistent issues around certification, market alignment and inclusion of marginalized groups. Government initiatives – through 1,450 digital hubs25 and programmes such as Ajira Digital26 and Jitume27 – aim to boost digital literacy, rural access and employment. While these have achieved considerable scale, stakeholders noted outdated curricula, weak employer linkages and low job retention. They called for greater market alignment, AI literacy and certification recognition.Kenya’s BPO sector has drawn particular attention from investors. The Tatu City BPO hub,28 a public– private partnership within a 5,000-acre special economic zone (SEZ), has attracted $50 million from CCI Global to build the country’s largest call centre. The facility is expected to create more than 5,000 jobs in the short term and is a notable example of infrastructure-backed investment to support outsourcing. However, the absence of a robust policy and regulatory framework for platform and BPO workers limits the potential for these investments to yield high-quality jobs. The National BPO Policy (2025),29 if implemented effectively, could serve as a blueprint for inclusive growth by tying investment incentives to compliance with labour standards. To unlock the full potential of digital investment, Kenya must ensure that inflows of capital are accompanied by enforceable norms on fair pay, fair working conditions, social protection and skills development. Stakeholders advocate “investment- plus” strategies – public–private partnerships designed with labour outcomes and community benefit at the core. 1.2 Investment Trade and Labour: Pathways for Decent Work in Kenya’s Digital Economy 8

Trade and Labour Pathways for Decent Work in Kenya's Digital Economy 2025