Kenya Clarifies Foreign Traders’ Rights After Ruto Small Business Remarks

GOOBJOOG NEWS | NAIROBI: Kenya’s government has moved to clarify President William Ruto’s remarks on foreign-owned small businesses, saying foreign traders who have the required work permits and business licences remain legally protected, even as the administration pushes for greater opportunities for Kenyan entrepreneurs.

Ruto said on Sept. 2 that small-scale activities such as hawking and running small retail shops should be reserved for Kenyans, arguing that foreign investment should instead focus on ventures that bring capital, jobs, technology and wider economic benefits.

His comments prompted reports that authorities would begin action against foreigners operating small businesses from Sept. 7. But Foreign Affairs Principal Secretary Korir Sing’oei said on Sunday that the president’s remarks had been taken out of context and were made in relation to the Local Content Bill, 2025, now before Parliament.

Sing’oei said foreign nationals who meet Kenya’s legal requirements, including holding the necessary permits and licences, remain entitled to operate businesses in the country. The clarification leaves questions over how any enforcement measures would affect foreign traders who are undocumented or operating outside the terms of their permits.

The dispute comes against the backdrop of the Local Content Bill, which seeks to increase the participation of Kenyan businesses and workers in economic activity involving foreign companies.

The proposed legislation would require foreign companies in specified sectors to source a significant share of goods and services locally and give preference to qualified Kenyan workers. The Bill also aims to promote employment, strengthen local businesses and ensure that foreign investment generates greater benefits for the Kenyan economy.

Ruto has argued that Kenya remains open to foreign investment, particularly investments capable of bringing substantial capital, employment and technology, while expressing concern about foreign nationals competing directly with Kenyans in small-scale retail and hawking.

INVESTMENT BALANCE

The debate highlights the challenge facing Kenya as it seeks to protect opportunities for local entrepreneurs while continuing to attract foreign capital.

Kenya’s latest Foreign Investment Survey shows that the stock of foreign direct investment reached KSh1.4575 trillion ($11.3 billion) at the end of 2023, an 8.5% increase from the previous year.

The government’s position therefore appears to distinguish between foreign investment that contributes capital and wider economic benefits and small-scale commercial activity that directly competes with local traders.

The issue is particularly relevant to Kenya’s large migrant and diaspora communities, including Somalis who operate businesses across the country. The impact on individual traders is likely to depend on their immigration status, business licences and the eventual interpretation and implementation of any new measures.

For now, the government’s clarification means that legally documented foreign traders cannot simply be described as being subject to a blanket ban, while the wider debate over who should participate in Kenya’s small-business economy continues.