Kenya’s president has ordered a crackdown on foreign nationals running small businesses, a move that has drawn accusations of xenophobia.

The policy is a recognisable one. Versions of it appear across many countries, usually during periods of economic strain, and the arguments made for and against it are consistent enough to be worth setting out properly rather than simply reporting the reaction.

What is being restricted

Many countries reserve certain categories of small-scale commerce for citizens — market stalls, small retail, informal trading — while permitting foreign investment above a capital threshold. The stated logic is that large investment brings capital and jobs, while small-scale trading competes directly with citizens who have few alternatives.

Enforcement is usually the variable rather than the law. Rules of this kind frequently exist on the books for years and are applied intermittently. A “crackdown” therefore often means a decision to enforce existing provisions rather than the creation of new ones, and that distinction matters for how it will be experienced: people operating businesses that were tolerated for years find them suddenly unlawful.

The case made for it

Governments defending these measures make three arguments.

That reserving small-scale trade for citizens is a normal exercise of sovereignty, practised widely including by wealthy states that restrict work rights by visa category. That where youth unemployment is high, protecting the sectors with the lowest barriers to entry is a legitimate labour market policy. And that enforcing business registration and tax compliance is ordinary regulation, applied to everyone, that happens to affect informal traders disproportionately because they are disproportionately informal.

The case against

Critics, including rights organisations, make arguments of a different kind.

The first is about who is actually affected. In East Africa, many foreign traders are refugees or long-settled migrants from neighbouring countries — people who cannot simply return, and for whom informal commerce is the only permitted livelihood. A measure framed as economic policy can function as removal of the sole means of subsistence for people with protected status.

The second is about consequences. Research on similar measures elsewhere finds that closing foreign-run businesses rarely produces a matching number of citizen-run replacements, because the constraint on new business formation is usually capital and premises rather than competition. Prices in affected markets tend to rise.

The third is about what enforcement licenses. Where a state announces that a category of person should not be trading, the practical enforcement is frequently carried out informally — by officials seeking payments, or by competitors. Episodes of this kind in the region have preceded serious violence against foreign nationals, most visibly in South Africa.

The regional context

Kenya hosts a substantial refugee population, principally from Somalia and South Sudan, in camps and increasingly in urban areas. It is also a member of the East African Community, whose common market provisions envisage free movement of workers and the right of establishment across member states.

Those commitments are not self-enforcing, and member states have consistently retained more control over labour markets than the treaty texts suggest. A national crackdown on foreign traders sits awkwardly with regional integration, and the tension between the two is not new.

What to watch is enforcement rather than announcement: whether this produces sustained action, and whether the people affected turn out to be recent arrivals with alternatives or long-settled residents without them.

Sources

• NPR world coverage, Kenya’s president orders a crackdown on foreigners running small businesses, 8 September 2026
• East African Community Common Market Protocol provisions on free movement and right of establishment
• UNHCR data on refugee populations hosted by Kenya
• Published research on nationality restrictions in informal retail sectors