Kenya: Ruto Orders Foreign Small Business Regularisation

• President William Ruto issued a directive on September 2 for the closure of small businesses operated by foreigners, with enforcement beginning September 7.
• Hundreds of Burundian traders gathered at their embassy in Nairobi by September 7, seeking travel documents or assistance to regularise their status.
• Trade Cabinet Secretary Lee Kinyanjui clarified that visa-free entry does not confer the right to work or operate a retail business without permits.
• The Kenyan government announced a temporary window for undocumented EAC citizens to regularise their status and warned against harassment.
• The incident highlights ongoing challenges in East African integration, including persistent non-tariff barriers, despite Article 13 of the EAC Customs Union Protocol.

The fundamental argument arising from this scenario is that illegal activity should be addressed as such, without nationality serving as a substitute for evidence of wrongdoing.

On September 2, President William Ruto addressed micro, small, and medium-sized enterprise traders and investors at State House in Nairobi, issuing a directive for the closure of small businesses operated by foreigners. This presidential instruction, aimed at addressing grievances within the local business community, stipulated that enforcement would commence just five days later, on September 7. The announcement of this President Ruto foreign traders directive immediately generated considerable uncertainty among foreign entrepreneurs, particularly those from Burundi.

The impact was swift and visible. By September 7, hundreds of Burundian traders had converged outside their embassy in Nairobi. Many sought travel documents to facilitate their return home, while others urgently requested assistance to regularise their operational status within Kenya. In response to the growing concern and the plight of Burundian traders in Nairobi, the Kenyan government rapidly moved to mitigate the negative repercussions of the initial directive. Trade Cabinet Secretary Lee Kinyanjui clarified that while East African Community (EAC) citizens might enjoy visa-free entry into Kenya, this privilege does not automatically grant the right to work or operate a retail business without obtaining the necessary permits and licenses.

Following the initial directive, the Kenyan government announced a temporary window specifically for undocumented EAC citizens to regularise their status, alongside a stern warning against any form of harassment or discrimination targeting these traders. This move underscored Kenya's legitimate right to enforce its immigration and business laws, ensuring compliance across all enterprises. However, it also highlighted a critical distinction: the enforcement of legal requirements, such as obtaining Kenya business permits and adhering to Kenya immigration law enforcement, should not be conflated with an exclusionary policy based purely on nationality.

The government's clarification implicitly acknowledged that the core issue lies with undocumented immigration, illegal employment, and unlicensed businesses, rather than the national origin of the entrepreneurs themselves. This perspective is crucial for maintaining a fair and predictable business environment, allowing for the proper application of existing statutes without resorting to broad generalizations that could undermine regional integration efforts.

The situation in Nairobi brings into sharp focus the persistent challenges hindering East African integration. For many years, the region has grappled with removing various impediments that prevent the efficient movement of goods and services among Partner States. Article 13 of the EAC Customs Union Protocol explicitly mandates Partner States to eliminate existing non-tariff barriers to goods originating from other member countries and to refrain from imposing new ones, save for permitted exceptions. Despite this foundational agreement, these barriers have proven remarkably stubborn.

Data from TradeMark Africa illustrates this ongoing struggle, reporting a significant increase in the average time required to resolve identified non-tariff barriers within the EAC, which surged from 76 days in 2021 to a staggering 274 days in 2024. This context is vital when considering the economic activities of foreign small businesses in Kenya. For instance, a Burundian woman selling maandazi in Nairobi sources her flour from a Kenyan shop, purchases cooking oil from a Kenyan wholesaler, pays rent to a Kenyan landlord, and sells her products to Kenyan consumers. Similarly, a Ugandan mechanic operating a garage in Nairobi buys spare parts from Kenyan suppliers, pays rent locally, potentially employs Kenyan assistants, and services vehicles primarily owned by Kenyan customers. In both scenarios, while their passports indicate foreign nationality, their economic activity is overwhelmingly integrated into the Kenyan economy, contributing to local supply chains and employment.

The fundamental argument arising from this scenario is that illegal activity should be addressed as such, without nationality serving as a substitute for evidence of wrongdoing. Kenya possesses the sovereign right to identify individuals who are undocumented, operating without licenses, evading taxes, or violating the conditions of their work permits. These are specific, investigable issues that can be resolved through due process and the application of existing laws.

The nationality of an individual, however, does not inherently answer these questions. The focus should therefore remain on ensuring compliance with Kenya's robust immigration and business regulations, including the proper acquisition of EAC citizens Kenya business permits, rather than broadly targeting individuals based on their country of origin. This approach aligns with the spirit of regional cooperation while upholding national legal frameworks.

Lawyers advising EAC citizen clients operating businesses in Kenya must immediately review their permit and licensing status, leveraging the temporary regularisation window announced by the Kenyan government. They should also counsel clients on potential discrimination issues and the importance of adhering strictly to immigration and business laws.

Source: Reporting based on recent regional coverage.