NAIROBI, Kenya- President William Ruto has ordered a crackdown on foreigners operating small businesses and engaging in hawking in Kenya, saying local traders must be protected from unfair competition.
Ruto issued the directive on Wednesday, September 2, 2026, while meeting Micro, Small and Medium Enterprises (MSMEs) at State House in Nairobi.
He directed the Ministry of Investments, Trade and Industry to begin enforcement action from Monday, September 7, against foreign nationals involved in small-scale businesses that the government considers suitable for Kenyans.
The President said foreigners should come to Kenya to make investments that create jobs and expand production rather than compete with citizens in hawking and small retail.
“We have not improved investor confidence for hawkers to come to Kenya,” Ruto said.
He also questioned the entry of foreigners into businesses such as selling duvets and other merchandise directly to consumers, saying such activities were taking opportunities away from Kenyan traders.
Ruto directed Trade Cabinet Secretary Lee Kinyanjui to commence the crackdown when he returns from Addis Ababa, while National Assembly Majority Leader Kimani Ichung’wah was tasked with helping fast-track legislation on businesses that could be reserved for Kenyan citizens.
The proposed legislation has brought renewed attention to the question of how Kenya balances foreign investment with protection of local enterprises.
Ruto maintained that Kenya remains open to foreign capital, but argued that foreign investors should focus on manufacturing, production and other activities that generate employment rather than entering low-capital retail businesses.
Bigger question for Kenyan businesses
The crackdown comes at a time when small Kenyan traders are already complaining about the rising cost of doing business.
On August 28, police used tear gas to disperse traders protesting changes to the customs valuation benchmark for consolidated cargo.
The Kenya Revenue Authority had raised the minimum benchmark from Sh2.5 million to Sh3.2 million, with traders warning that the increase would raise their costs and hurt businesses dependent on consolidated shipments.
The customs dispute has since been followed by government concessions.
On Wednesday, September 2, the government agreed to lower the benchmark for general consolidated cargo to Sh2 million and reduce the cost of moving cargo from the Inland Container Depot to the Bomaline De-consolidation Centre from Sh58,000 to Sh10,000.
The developments have placed the spotlight on the wider challenges facing Kenyan MSMEs: taxation, logistics costs, access to affordable capital and competition.
For some traders, therefore, the foreign-hawker crackdown addresses only one side of the problem.
While foreign nationals operating businesses reserved for Kenyans may create direct competition, local enterprises also face competition from larger and better-capitalised companies, imported goods and increasingly sophisticated distribution networks.
But for many traders, the problem goes beyond a foreigner operating a small shop.
The bigger concern is the financial muscle behind some foreign businesses, particularly Chinese-owned enterprises that can tap into established manufacturing and supply networks, import merchandise in large quantities and benefit from economies of scale.
That allows some businesses to offer prices that small Kenyan traders find extremely difficult to match.
The phenomenon has already been seen in Nairobi, where Chinese-owned retailers such as China Square have attracted customers with low-priced household goods and other merchandise.
A 2025 analysis by the NTU-SBF Centre for African Studies noted that China Square had disrupted Kenya’s retail market with aggressively low prices, with some products selling for substantially less than comparable items in local shops.
Kenyan traders have repeatedly complained that they cannot compete against businesses with access to cheaper goods and larger volumes.
The issue was also examined by Parliament following complaints from traders who accused China Square of undercutting local businesses.
A parliamentary report noted that local traders felt foreign investment in small trade was threatening their businesses and called for policies to protect them from unfair competition.
