President William Ruto has announced a crackdown on foreign nationals operating small retail shops and engaging in hawking, directing authorities to begin shutting down such businesses from September 7. Ruto made the announcement on September 2 during a meeting with micro, small and medium-sized enterprise (MSME) traders at State House in Nairobi. He stated that foreigners should not compete with Kenyans in businesses such as hawking and small retail, while welcoming foreign investment in sectors requiring greater capital.
The government plans to take administrative action while Parliament considers the proposed Local Content Bill, 2025, which aims to require foreign companies to increase local sourcing and employment. Ruto instructed National Assembly Majority Leader Kimani Ichung’wah and Trade Cabinet Secretary Lee Kinyanjui to expedite the bill’s passage.
Hesbon Hansen Owilla, a professor at Aga Khan University, expressed support for the policy, stating it would protect Kenyan traders by limiting competition from small-time foreign traders. He emphasized the need for foreign investment that contributes to economic development rather than displacing local businesses.
The proposed Local Content Bill is still under consideration and has not yet been enacted into law. The government has not provided a comprehensive list of businesses affected by the September 7 directive or an estimate of how many foreign nationals will be impacted.
Ruto also directed Ichung’wah to collaborate with the State Department for Immigration to establish requirements for permits issued to foreign investors and traders. It remains unclear how the directive will affect foreign nationals who already hold permits to conduct business in Kenya.
Foreign Affairs Principal Secretary Korir Sing’Oei noted that foreign nationals who meet Kenya’s legal requirements, including holding the necessary work permits and licenses, are legally protected to operate businesses in the country. He clarified that Ruto’s remarks were made in the context of the Local Content Bill, 2025.
According to Kenya’s 2024 Foreign Investment Survey, the stock of foreign direct investment in the country was 1.458 trillion Kenyan shillings ($11.27 billion) at the end of 2023, marking an 8.5 percent increase from the previous year. This figure encompasses foreign investment across various sectors and is not limited to small-scale trading activities targeted by Ruto’s directive.
The survey indicated that foreign-invested enterprises employed 224,769 people in June 2024, with 221,267 being Kenyan employees, while foreign employees accounted for 1.6 percent of the workforce.
Separately, the Tata Chemicals dispute involves the company’s soda ash operations at Lake Magadi, which were suspended by the Kenyan government on July 28 due to alleged compliance issues. Ruto stated on September 3 that he had ordered Tata Chemicals to leave Kenya for not providing sufficient benefits to the local community. The company has maintained that it complied with regulatory requirements and is seeking to resolve the matter through legal channels.
International business consultant Solomon Kinyanjui emphasized the need for foreign investment to complement Kenyan enterprise rather than displace it. He noted that the government should clearly define the role of foreign capital in the economy.
Journalist Hafsa Abdiwahab Sheikh commented that the policy could have both positive and negative effects, potentially creating jobs for Kenyans while also risking discouragement of foreign investment if implemented unpredictably.
SOURCE: Al Jazeera English