Kenya has begun moving against foreign nationals operating small retail shops and engaging in hawking, after President William Ruto directed authorities to start shutting down such businesses on September 7. Ruto announced the measure on September 2 while addressing micro, small and medium-sized enterprise traders at State House in Nairobi.
Ruto said small-scale retail and hawking should be reserved for Kenyans, while foreign investment remained welcome in activities requiring greater capital and investment. The government has not yet published a comprehensive list of affected businesses or said how many foreign nationals could be affected.
How the government says the policy will work
Ruto directed National Assembly Majority Leader Kimani Ichung’wah and Trade Cabinet Secretary Lee Kinyanjui to accelerate consideration of the Local Content Bill, 2025. He also directed Ichung’wah to work with the State Department for Immigration’s principal secretary to establish the requirements governing permits issued to foreign investors and traders.
The proposed bill would require foreign companies to increase local sourcing and employment, among other measures. It remains under parliamentary consideration, so it is not the legal basis of an enacted new rule.
What we know now
- The proposed Local Content Bill, 2025, is still being considered by Parliament and has not been enacted.
- The directive specifically refers to foreign nationals operating small shops and hawking; Kenya’s wider MSME sector is broader.
- It is not yet clear how the directive will apply to foreign nationals who already hold business permits.
- Foreign nationals who meet legal requirements, including holding necessary work permits and licences, remain legally protected to operate businesses, according to Foreign Affairs Principal Secretary Korir Sing’Oei.
Why the policy is being defended
Hesbon Hansen Owilla, a professor at Aga Khan University in Nairobi, said the policy could protect Kenyan small businesses and traders. International business consultant Solomon Kinyanjui said the intended distinction was between foreign capital that complements Kenyan enterprise and activity that displaces businesses Kenyans can undertake themselves.
Kinyanjui said the stronger case for foreign investment was where it brought capital, technology, skills, industrial capacity and access to export markets. He also warned that the government would need to define the boundary clearly and apply the rules predictably.
Journalist Hafsa Abdiwahab Sheikh said implementation could create jobs and encourage skills transfer, but warned that unpredictability could discourage investment, raise business costs and affect relations with foreign communities.
Foreign investment figures provide a wider context
The Kenya National Bureau of Statistics’ 2024 Foreign Investment Survey put Kenya’s total stock of foreign direct investment at 1.458 trillion Kenyan shillings ($11.27bn) at the end of 2023, up from 1.343 trillion shillings ($10.4bn) at the end of 2022. The figures cover the entire economy, not only the small-scale activities targeted by the directive.
Surveyed foreign-invested enterprises employed 224,769 people in June 2024, including 221,267 Kenyans. Foreign employees accounted for 1.6 percent of the workforce in those enterprises.
The Tata Chemicals dispute is separate
The government’s dispute with Tata Chemicals Magadi concerns the company’s soda ash mining and export operations at Lake Magadi in Kajiado County, not the directive targeting foreign small retailers and hawkers. Kenya suspended those operations on July 28, citing alleged compliance issues under mining laws.
On September 3, Ruto said he had ordered Tata Chemicals to leave Kenya and that two new companies would be brought in to establish glass and chemical manufacturing facilities in the area. Tata Chemicals said it had submitted information requested by Kenyan authorities, complied with regulatory requirements and remained committed to resolving the matter through legal and regulatory channels.
What happens next
Parliament is considering the Local Content Bill, 2025, while government officials work to clarify permit requirements for foreign investors and traders.
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