Kenya Joins Tanzania in Restricting Foreign Small Businesses

President Ruto Orders Crackdown on Foreign Hawkers in Nairobi

President William Ruto directed the Ministry of Investments, Trade and Industry to initiate enforcement actions against foreign nationals running small businesses and hawking operations that are legally reserved for Kenyans. The directive, announced during a meeting with Micro, Small and Medium Enterprise traders at State House in Nairobi, bypasses the standard legislative timeline.

President William Ruto on Wednesday ordered authorities to begin shutting down small businesses operated by foreign nationals from Monday, Sept. 7, saying hawking and small-scale retail should be reserved for Kenyans. Speaking to micro, small and medium enterprise traders at State House in Nairobi, Ruto said Kenya welcomes foreign investment but argued that foreigners should not compete with citizens in businesses requiring little capital. From next week, all traders doing those small businesses should close them, Ruto said. We have made efforts to improve the economy, we have not improved investor confidence for hawkers to come to Kenya, he added.

The administration opted for immediate administrative measures rather than waiting for Parliament to pass ongoing legislation, as reported by The Star. Ruto directed the Ministry of Investments, Trade and Industry to begin enforcement next week against foreign nationals running businesses legally reserved for Kenyans. Ruto directed Industry Principal Secretary Juma Mukhwana to engage traders and other stakeholders to fine-tune the Bill before it is passed, saying the government wanted to close loopholes that could be exploited to continue allowing foreigners into small-scale businesses. He also directed National Assembly Majority Leader Kimani Ichung’wah to help push the legislation through Parliament.

“From next week, all traders doing those small businesses should close them.”

William Ruto, President of Kenya

While maintaining that the East African nation remains welcoming to large-scale international capital, Ruto stressed that low-capital retail does not serve the country’s broader economic development goals. According to Ruto, his administration since assuming office has worked to make the economy conducive for large-scale foreign investments, the types that create opportunities and wealth, not attracting small businesses that compete with the locals for small businesses. We have not built investor confidence so that hawkers can come to Kenya, Ruto said.

Legislative Push Through the Local Content Bill

To formalize the restrictions, the Kenyan government is pressing forward with the Local Content Bill, 2025, which is currently before Parliament. Ruto said the government would push ahead with legislation aimed at defining areas of economic activity that should prioritize Kenyan citizens. We have a bill in Parliament on Trade. In that bill, Local Content Bill, 2025, we have proposed that there should be businesses that foreigners should not do here in Kenya, by law, he said. It cannot be that a person comes from China or elsewhere to be a hawker or open a small shop, Ruto added.

The proposed legislation addresses foreign participation in certain small-scale businesses. The Local Content Bill, currently before Parliament, proposes that foreign companies employ Kenyans as at least 80% of their workforce and source at least 60% of specified goods and services locally.

Regional Alignment Across African Retail Restrictions

Ghana, Tanzania and Botswana have reserved selected businesses for citizens, ranging from petty retail and mobile money services to salons and small-scale manufacturing. The measures point to an emerging distinction across the continent between foreign investment that brings capital, technology and jobs, and foreign participation in low-capital businesses that provide livelihoods for millions of Africans.

In August, the Ghana Investment Promotion Authority (GIPA) announced stronger enforcement of rules reserving informal retail for citizens. The informal retail space by law is reserved exclusively for citizens of Ghana, and that is non-negotiable, GIPA chief executive Simon Madjie said. Regardless of the amount of money you bring, you cannot enter the informal retail space because that market is reserved for Ghanaians. The restrictions cover activities such as open-market trading, small shops and kiosks. Ghana, however, remains open to foreign investment in formal retail, including supermarkets and malls. Trade Minister Elizabeth Ofosu-Agyare has also addressed the matter.