Kenyan president orders crackdown on foreign small-scale traders

Speaking to small-scale traders at State House in Nairobi on Wednesday afternoon, Ruto said foreign traders should close their small businesses from next week. He also promised to fast-track proposed legislation to bar foreigners from certain sectors.

"It cannot be that a person comes from China or elsewhere to be a hawker or open a small shop," Ruto said, according to a report by the BBC. He argued that investors—including Chinese traders—should create jobs and expand production rather than compete with Kenyans at the grassroots level.

Ruto insisted Kenya remained open to foreign investment, but stressed that foreign traders were welcome only if they created opportunities for Kenyans. The announcement comes as the president seeks a second term in next year's election.

The exact number of foreign nationals involved in small-scale trading is unclear, as is how many would be affected by the new crackdown. Kenya hosts a large refugee population, with government figures showing about 857,000 registered refugees and asylum seekers by the end of June, nearly 14% of whom live in urban areas. Kenyan law recognises refugees' right to work and operate businesses, though they must obtain appropriate documentation, including special permits for those wishing to engage in trade.

Why This Matters

The crackdown directly affects hundreds of thousands of migrants and refugees who depend on small-scale trade for livelihoods in Kenya's informal economy.
The policy signals a shift toward economic nationalism ahead of elections, potentially impacting diplomatic relations with China and other countries whose nationals are targeted.
It raises legal and humanitarian questions about the rights of refugees to work and operate businesses under Kenyan law.

Background

Kenya's informal economy employs a significant portion of the population, including many migrant workers and refugees from across Africa. The country hosts a large refugee population, primarily from Somalia, South Sudan, and the Democratic Republic of Congo. In recent years, there has been growing public debate about competition between local traders and foreign small-scale business operators, particularly in urban centers like Nairobi. President Ruto, who came to power in 2022, is preparing for a re-election campaign in 2027, and economic nationalism has featured prominently in his recent rhetoric.

Key Perspectives

Kenyan small-scale traders: They have long complained about competition from foreign hawkers and shop owners, whom they argue undercut prices and operate without proper licenses. Ruto's announcement was made directly to this group, suggesting strong political alignment.

Foreign traders and refugees: They argue they contribute to the economy, fill gaps in retail and services, and often operate legally under existing permits. The crackdown threatens their livelihoods and could force many into more precarious situations.

Critics/Skeptics: Human rights and refugee advocacy groups warn that the policy may violate Kenya's legal obligations to protect refugees' right to work. Business analysts question how the government will differentiate between legitimate foreign investors and small-scale traders, and whether enforcement will be selective or arbitrary.

What to Watch

The timeline and scope of enforcement: Will the "next week" deadline be met, or will implementation be delayed?
The fate of proposed legislation barring foreigners from certain trade sectors, and how it defines prohibited activities.
Reactions from China and other countries whose nationals are affected, as well as from UNHCR and refugee advocacy organizations.

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