Foreign traders orders: Who gains, who loses?

A controversial directive by President William ordering foreign traders to close down small-scale businesses has ignited intense debate over the government’s political motives.

Pundits are now divided on whether the move was a populist statement meant to woo political support the local small-scale traders ahead of the 2027 presidential polls or a calculated political distraction meant to deflate political pressure from the opposition.

Opposition leaders led by Wiper Patriotic Front (WPF) party leaders Kalonzo Musyoka say sinister motives have influences the government’s intended crackdown on foreigners.

“Challenges facing Kenyan small-scale traders go beyond the presence of foreign traders. Corruption, an unpredictable business environment, and erratic tariffs and taxation policies as the real drivers of the problem,” said Kalonzo yesterday.

The current administration is also facing growing criticism over public debt, increased taxation and a rising goonism culture and violence against leaders and their opposition supporters.

While president Ruto’s aides maintains that the directive is meant to protect local traders, panic has ensued after the directive took effect on Monday with thousands of Burundi nationals swarming their embassy in Nairobi to get travel assistance.

The fact that the president has remained quiet despite the mayhem taking place at the Burundi Embassy and the anxiety among many young families affected has only compounded fears about his intentions.

It is not clear why only Burundi traders are affected, yet there are thousands of Tanzanian traders selling second hand clothes, working as night guards across Nairobi and other towns and many others doing boda boda (motorcycle taxi) business.

Thousands of Ugandans are also in the country working as house girls, bar maids, mechanics, while many more have also acquired identity cards in counties like Trans Nzoia and Bungoma and could vote in the 2027 General Elections.

Other nationals from countries like Somalia and Ethiopia are also engaged in more lucrative businesses like importation and sale of clothes and operation of super markets and clothing shops, while some are also land lords in the city. 

Writing the US where he is currently visiting, Democracy for Citizens (DCP) party leader Rigathi Gachagua also condemned the crackdown on the foreign traders

“President Ruto's directive to remove foreign nationals from the country is like the 1972 expulsion of South Asians from Uganda by dictator Idi Amin Dada,” said Gachagua.

Observers have now raised questions on the directive, warning that it could have the ripple effect of having Kenyans working and living abroad being repatriated as a retaliatory measure.

Professor of Leadership and Management Gitile Naituli avers that the President’s directive was both populist and a red-herring.

“The foreign traders are convenient political targets precisely because they possess little power. When governments become unpopular, scapegoating offers an attractive political shortcut: identify a visible minority, associate it with the economic suffering of citizens and suggest that removing that minority will restore prosperity,” states Naituli.

He added: “A Burundian doing Mjengo (construction work) in Nairobi is not responsible for Kenya’s unemployment crisis. A Rwandan running a small shop did not decide our taxation system. A Congolese waiter did not accumulate Kenya’s public debt. A Ugandan mechanic did not determine interest rates, government expenditure or economic policy.”

Last week, President Ruto decreed that foreigners operating small-scale businesses should shut down their operations arguing that such activities be reserved for Kenyans.

“All those traders and hawkers doing these small businesses should close down, and if they don’t... We have not built investor confidence so that hawkers can come to Kenya. The investor confidence we have built is for investors to come to Kenya, not hawkers and traders. People should not confuse us,” he said.

Ruto said the Government was seeking to protect economic opportunities for Kenyans while distinguishing between genuine foreign investors and those engaged in small-scale trading.

“We have not built investor confidence so that hawkers can come to Kenya. The investor confidence we have built is for investors to come to Kenya, not hawkers and traders. People should not confuse us,” he said.

But in its wake, the directive has raised questions over whether the Government is applying the rules uniformly to all foreign nationals engaged in small-scale businesses. While it affects citizens of Burundi, Uganda, Tanzania and Rwanda, whose nationals enjoy rights under the East African Community Common Market framework, Burundians seem to have borne the brunt.

On Monday and Tuesday, Images online appeared to show some foreigners being harassed while conducting business, including selling coffee and mandazi in the Gikomba and wetlands area.

 Long queues were also witnessed outside the Burundian embassy with those on the line reportedly seeking documentation and facilitation to return to Burundi. At Nairobi’s famous Country Bus Station, scenes shared on social media showed anxious foreign nationals scrambling for limited buses travelling to neighboring countries. Several buses were labelled Burundi, Rwanda and DRC, amid reports that some foreigners were making arrangements to leave Kenya.

According to the EAC common market protocol, citizens of EAC partner states are entitled to vis-free entry in member states for holiday, medical, or study purposes for up to 6 months.  Passports or simplified temporary permits are required but countries such as Kenya, Uganda and Rwanda which allow the crossing of borders using national identity card.

It also provides that citizens of host countries have the right to set up businesses, move with their spouses or dependents, and reside in a host country, provided they follow local statutory registration rules.

But given recent developments, tensions between Kenya and Burundi are escalating. On Monday, Burundi’s Foreign Minister Édouard Bizimana warned that continued hate speech targeting Burundians could strain relations between the two countries.

“Kenyans live peacefully in Burundi. But if this hate speech against Burundi continues, things will certainly change. Kenya’s government is responsible for the lives of Burundians living in Kenya,” Bizimana wrote on X, tagging Kenya’s Parliament.

His remarks came amid calls for a cessation of hostilities towards the foreign business owners.

Yesterday, Senator Danson Mungatana condemned the attacks warning that they risked perpetuating organized xenophobia.

“Kenya and Burundi are members of the East African Community and share a common vision of regional integration and economic cooperation. We must not allow economic frustrations, political rhetoric or competition for business to turn African communities against each other,” said Mungatana.

He cautioned that there are genuine concerns about foreign nationals competing unfairly with Kenyan businesses, let them be addressed through proper policy, licensing, taxation, immigration and labour enforcement

Professor Gitile Naituli now argues that President William Ruto’s increasingly hostile rhetoric towards foreigners doing small businesses and low-paying jobs in Kenya was being presented as a defence of Kenyan workers but it had the potential to make sure that the people who will ultimately suffer most are not the Burundians, Ugandans, Rwandans or Congolese being targeted today, but Kenyans living, working and investing across the region.

“If Burundi concludes that its citizens are no longer welcome in Kenya, what prevents political pressure developing for restrictions against Kenyans in Bujumbura? If Rwanda responds similarly, Kenyan professionals and businesses there could suffer. If Uganda decides that Kenyans should surrender opportunities supposedly belonging to Ugandans, thousands of livelihoods could be endangered. And the DRC matters enormously. Kenyan banks, businesses, professionals, traders and workers have increasingly looked towards Congo as an important economic frontier,” states Naituli.

“This is why I am increasingly unwilling to accept the simplistic explanation that this policy is merely about protecting Kenyan jobs. There is another possibility that deserves examination.”

The State however maintains every person conducting business in Kenya is required to comply with immigration, work-permit, registration and licensing requirements.

Through a statement, government spokesperson Hussein Mohammed said the government will carry out an orderly regularization exercise over the next 90 days, coordinated by relevant agencies in consultation with the embassies concerned, to give affected persons a structured opportunity to regularize their immigration status and business operations.