Kenya’s attempt to protect small businesses is exposing a bigger question for East Africa: can national economic interests coexist with the promise of a single regional market?
Kenya’s crackdown on foreign nationals operating small businesses has moved from a political announcement to an enforcement issue, with the government targeting foreigners involved in hawking, small-scale retail and similar businesses.
President William Ruto announced the measures on September 2, arguing that businesses requiring little capital should provide opportunities for Kenyans, while foreign investment should be directed towards activities requiring greater capital. Enforcement began on September 7.
The government has since sought to clarify that the directive is not a blanket expulsion of foreigners. Trade Cabinet Secretary Lee Kinyanjui said visa-free entry does not automatically confer the right to work or operate a business, and that foreigners must comply with Kenya’s immigration, work-permit, licensing and other regulatory requirements.
That distinction is central to the East African Community debate. Under the EAC Common Market Protocol, citizens of Partner States have rights to free movement and establishment. The EAC says self-employed citizens have the right to establish businesses in another Partner State and pursue economic activities in accordance with the host country’s national laws. The Protocol also commits Partner States to remove restrictions on establishment based on nationality.
That does not mean an EAC citizen can enter Kenya and operate a business without registration, permits or compliance with Kenyan law. The Common Market is not a licence to ignore national regulations. The harder question is what happens when an EAC citizen is legally established and compliant but is excluded from an activity because they are not Kenyan.
That question is already becoming regional. Hundreds of Burundians gathered at their embassy in Nairobi on September 7 seeking travel documents amid fears of enforcement, with some reportedly preparing to leave Kenya. The Kenyan government has since announced a temporary amnesty and registration process for undocumented East African nationals, aimed at bringing them into the legal framework rather than simply forcing them out.
The episode has also attracted concern from the East Africa Law Society, which has urged Kenya to distinguish unlawful conduct from nationality and to respect its obligations under the EAC Common Market.
Tanzania, meanwhile, is reviewing whether Kenya’s decision to reserve certain small-scale activities for its citizens is consistent with the Common Market Protocol. Its Foreign Affairs and East African Cooperation ministry has said it is examining the measures and the activities Kenya intends to reserve exclusively for Kenyans.
The economic stakes are significant. Intra-EAC trade rose 28 percent to $19.3 billion in 2025, according to the EAC’s latest trade statistics. That growth illustrates the economic opportunity the region is trying to create through integration.
Kenya also has a legitimate domestic argument. Small businesses are a major source of employment and income, and local traders can reasonably demand action against foreigners operating illegally or competing without complying with the same regulatory requirements.
But the regional risk comes if enforcement moves from legality to nationality. If a Ugandan, Tanzanian, Burundian or Rwandan who has legally established a business in Kenya can nevertheless be excluded simply because the business is considered too small or reserved for Kenyan citizens, other EAC governments could face pressure to respond in kind. Kenya could protect Kenyan traders; Uganda could reserve more activities for Ugandans; Tanzania could follow; and the Common Market could gradually become a collection of protected national markets.
For businesses, that would undermine one of the biggest promises of regional integration: the ability to treat East Africa as a larger commercial space rather than five or more separate markets.
The issue therefore extends beyond hawkers and small shops. It touches Ugandan SMEs seeking customers in Kenya, Kenyan companies expanding into Uganda and Tanzania, regional investors establishing subsidiaries, professionals moving across borders and businesses building supply chains that depend on predictable access to neighbouring markets.
The EAC itself acknowledges that the Common Market is not yet fully implemented. Its central principles include non-discrimination on grounds of nationality, equal treatment and the free movement of people, labour, services and capital, alongside the right of establishment.
Kenya can enforce its immigration and business laws while protecting local entrepreneurs. But the regional test will be whether those rules are applied to illegal activity or nationality.
That is why Kenya’s crackdown matters beyond Nairobi’s informal markets. It is testing whether East Africa can protect national economic interests without weakening the regional economic rights that underpin the Common Market.
The fundamental question is no longer simply who should operate a kiosk in Nairobi.
It is whether East Africa can genuinely build one market if its member states increasingly reserve economic opportunities for their own nationals.
