This article discusses the role of the State in relations between foreign and local capital in Kenya. Because of their control over the technology that accelerates capital accumulation, multinational firms have considerable leverage vis‐a‐vis the Kenyan state. But that state still plays a critical, independent role : though it shapes privileges for the multinationals, it also enforces local sharing of them and disciplines local capital. The State emerges as a key instrument in shaping a new‐style inequality in Kenya, with an emerging indigenous bourgeoisie and multinationals benefiting heavily, and most Kenyans excluded.