Ruto Takes Foreign Traders Fight to Parliament: Businesses That Could Be Reserved for Kenyans

President William Ruto's controversial campaign to restrict foreigners from Kenya's small-business sector is moving from presidential declarations to Parliament, where proposed legislation could provide the legal framework for reserving some businesses exclusively for Kenyan citizens.

The government is looking at two Bills already before Parliament as it seeks to reshape foreign participation in Kenya's informal and small-enterprise economy.

They are the Local Content Bill, 2025, sponsored by Laikipia Woman Representative Jane Kagiri, and the Micro and Small Enterprises (Amendment) Bill, 2025, sponsored by Manyatta MP Gitonga Mukunji.

Ruto has specifically directed that the Local Content Bill be expanded to establish clearer rules governing foreign participation in small-scale trade and identify economic activities that could legally be reserved for Kenyan citizens.

The development represents an important change in the government's approach following the controversy triggered by Ruto's September 2 declaration that foreigners should not operate businesses such as hawking and small retail shops that require little capital.

Which businesses could foreigners be locked out of?

The final list has not yet been established in law.

However, Ruto has specifically mentioned activities such as hawking, kiosks and small-scale retail businesses as examples of economic activities he believes should be reserved for Kenyans.

The President's argument is that Kenya should continue welcoming major foreign investors who bring capital, technology and employment but protect low-capital businesses that provide livelihoods to millions of Kenyan households.

That distinction could now be written into law.

The Local Content Bill is expected to be expanded to identify specific categories of economic activity that foreigners would either be prohibited from entering or subjected to additional restrictions.

Until Parliament passes such legislation, however, presidential statements alone do not create a new category of prohibited businesses.

What does the Local Content Bill propose?

The Local Content Bill was originally introduced for a broader purpose than restricting foreigners from kiosks and hawking.

It seeks to increase the amount of Kenyan goods, services, labour and expertise used by foreign companies operating in the country.

One of its most significant provisions would require a foreign company operating in Kenya to source at least 60 per cent of qualifying goods and services locally, provided those goods and services meet prescribed standards.

The legislation defines local content as value added to Kenya's economy through locally available goods, services, supplies and workers.

It also proposes that foreign companies employ qualified Kenyan citizens across management and other levels of their organisations.

Companies that fail to comply could face severe penalties.

According to the Bill, a corporate offender could face a fine of up to KSh100 million, while responsible executives could potentially face imprisonment.

The Bill has already undergone debate in the National Assembly and is awaiting further consideration at committee stage.

Ruto now wants its scope widened to deal explicitly with foreign participation in small enterprises.

The second Bill

The Micro and Small Enterprises (Amendment) Bill, 2025 provides another possible legislative route.

Sponsored by Manyatta MP Gitonga Mukunji, the Bill seeks amendments to Kenya's Micro and Small Enterprises Act aimed at strengthening local enterprises, including promoting Kenyan products and services and increasing their consumption in the domestic market.

Both Bills were introduced before Ruto's latest crackdown.

The President's intervention could therefore significantly alter the political importance of legislation that was already moving through Parliament.

What happens during the next 90 days?

Foreigners have not been given 90 days to leave Kenya.

Following confusion and fear caused by the President's initial remarks, State House announced a 90-day regularisation exercise.

Foreign nationals operating businesses in Kenya are being given that period to ensure that their immigration status, work permits, business registrations and licences comply with existing Kenyan law.

After the 90-day period expires, State House says immigration, work-permit and licensing laws will be strictly enforced.

The government has also warned Kenyans that the exercise does not authorise individuals or groups to close foreign-owned businesses, threaten foreigners or carry out vigilante enforcement.

Only authorised government agencies can enforce immigration and business laws.

What about East African citizens?

This could become the biggest legal and diplomatic question surrounding the proposed restrictions.

Kenya is a member of the East African Community, whose integration framework provides for freer movement of people, labour, services and capital among partner states.

Citizens of EAC countries therefore occupy a different legal position from many other foreign nationals.

The government says the regularisation programme will be implemented in accordance with both Kenyan law and East African rules governing movement of labour, goods and services.

EAC nationals wishing to live, work, trade or invest in Kenya can also be required to obtain the appropriate immigration documentation, including the relevant Class R permit.

The more difficult question is whether Kenya can legally prohibit an otherwise properly documented EAC citizen from participating in a particular business purely because of nationality.

That issue could eventually face legal scrutiny if Parliament adopts broad nationality-based restrictions.

Hundreds of Burundians seek to leave

The political debate has already had consequences beyond Parliament.

Hundreds of Burundian nationals have gone to their embassy in Nairobi seeking travel documents, with some telling Reuters that they intend to return home because they no longer feel safe in Kenya.

Some said they had experienced threats and harassment following Ruto's statements.

Kenya hosts approximately 16,000 Burundian refugees and asylum seekers, according to UN figures cited by Reuters, and many earn livelihoods through small businesses including coffee sales and second-hand clothing.

The government has sought to reassure foreign communities that legally resident foreigners remain protected.

State House has declared "zero tolerance" for xenophobia, harassment and intimidation.

Foreign Affairs officials have also met members of the Burundian community to clarify that the government's action is not a blanket expulsion of foreigners.

Why Ruto says the restrictions are necessary

The President's argument centres on economic opportunity.

Kenya has a vast informal economy employing millions of people, particularly young people and lower-income households.

Local traders have complained that foreign nationals are increasingly competing with Kenyans in businesses that traditionally require relatively little capital.

Ruto argues that Kenya can welcome foreign capital without allowing foreign investors or migrants to displace citizens from basic livelihood businesses.

Critics, however, warn that nationality-based economic restrictions risk creating xenophobic sentiment and could damage Kenya's reputation as East Africa's commercial hub.

The controversy therefore raises a much larger question:

Where should Kenya draw the line between protecting economic opportunities for its citizens and maintaining an open regional economy?

The real battle will be in Parliament

For now, foreigners who possess the necessary immigration documents, work permits and licences remain legally entitled to conduct businesses permitted under existing law.

The proposed restrictions will become much more consequential when MPs determine exactly which businesses should be reserved for Kenyans.

Parliament will have to answer questions Ruto's political declaration did not.

Will foreigners already operating affected businesses be forced to close?

Will existing investments be grandfathered?

Will the restrictions apply equally to EAC citizens?

What level of investment will distinguish a permitted foreign investor from a prohibited small trader?

And could foreign-owned companies simply register Kenyan shareholders to satisfy local-content requirements?

Those details will determine whether the policy becomes a targeted protection for Kenyan micro-enterprises or a much broader restructuring of who is allowed to do business in Kenya.