Policy, not knee jerk reactions, will save Kenya from menace of foreign traders

BY DENNIS NDIRITU

Kenyans were recently treated to shocking news in the local media of Chinese traders engaging in small-scale trade that has been the preserve of locals for a long time.

The Chinese are said to have taken over the supply and retail of mitumba clothing and other small scale businesses in Gikomba market among other local markets. An interview with a section of the aggrieved traders at Gikomba market elicited the pain of a workforce agitated by the proliferation of Chinese business in Kenya at a great cost to the local traders.

The traders say that the Chinese engage in a tactful venture into the market through research on the current trends in the local market by way of actual visits to the markets posing as customers and then supply the goods at a very cheap price to the retailers or open up stalls for sale of the similar products at a very low cost.

The existence of foreign businessmen has however been with us for a long time. The same Gikomba market, for instance has played host to Tanzanians of the Chaga dialect engaging in a raft of business among them selling of curtains and bed sheets for many years.

Further, Nigerian traders are all over the country engaging in all sorts of trade some as phony that can only be stated in hushed tones.

So what is the uproar with the emergence of a Chinese crop of small-scale traders? The real problem seems to be the race factor. The small businessmen have all through never felt threatened with the existence of other African traders who to great extent sale goods cheaply but can now claim mayday with the dawn of the Chinese.

The elephant in the room, however, is policy. What have we made of our investor policy that has proliferated small-scale foreigner businesses to the detriment of our citizens?

Over the past one year, there has been an increasing policy in Kenya to limit the number of foreign workers, in favor of Kenyans.  While this may seem to inhibit foreign investment in this market, the reality is that this has not hindered immigration into the country and the uptake of low-tier jobs by foreigners. Recently the Ministry of Immigration imposed additional requirements for foreign nationals seeking work permits.  The entire processing of the permit must take place while out of the country, and an employee cannot enter Kenya until it is approved.  In addition, the categories of employees that can qualify can change without notice, and holders of multiple passports can only have the work permit endorsed in one travel document.

Further there has been set no minimum salary level for work permits. There was established a new strict requirement that for each holder of a work permit, there is also a Kenyan understudy who must be trained to take the position held by the foreigner.  This new rule seemed to undercut any company that plans to assign staff long term to Kenya, with the exception of senior management or skilled technical employees.

There was also established a special 3-month work permit available that seeks to allow foreign employees to begin working while waiting for approval of their long-term work permit.  The special permit is viable for renewal for an additional 3 months if necessary, and is ideal for short-term assignments.  However, this temporary permit has a processing period of three months, so the best approach for foreigners is normally to send both applications simultaneously at least a month before the scheduled departure. Processing time for work visas can be lengthy with the new requirements, but the short-term work permit does take some pressure off while the application is reviewed.

Work permits are also very expensive in Kenya, opening avenues for corruption.  When you factor in the need to get a short-term permit as well, plus all of the rigors of submitting applications and supporting documents, it does make sense to use a local expert to assist you.  In that way, foreigners have the best chance of approval to work in Kenya. Once foreigners have a work permit, they can then apply for a residence permit or alien card.  This process can take 2-4 months for approval.

Currently, many of the foreigners arrive in Kenya with various visas only to buy work permits locally through cartels based at Nyayo House, Nairobi. This has led to increased corruption in the work permits’ business which compelled the government to compile an electronic register of all foreigners licensed to work in Kenya with a hard copy of the register dispatched to all police stations to ease the process of identifying foreigners allowed to work in the country.

The government through the Ministry of Interior and coordination in May 2018, announced a three-month moratorium to the process of issuing work permits to allow for a verification exercise, and seems to have actively  supported the deportation exercise launched by the police in mid last year.

A scrutiny of the report showed that a lot of aliens acquired their work permits though corrupt means and others were living locally without the required papers. The government undertook this exercise in a luke-warm manner perhaps keen not to antagonize to diplomatic relations with affected countries. Foreigners gain access through various ways, some as tourists, others as fugitives with a host of them keen to stay in cosmopolitan areas to avoid police radar. Leading nationalities in the cases include Nigerians, Congolese, South Sudanese, Tanzanians and Ethiopians.

There is seen to be a huge policy gap in the fight against foreign immigration in Kenya as some foreigners acquire East African member country IDs and can use their respective national IDs to get in and out of Kenya, Burundi, Rwanda, Tanzania and Uganda meaning some of those who can produce the documents can have their access into Kenya. The war by the government against foreign immigration also seems to have lost momentum as the deportations and aggressive search of illegal immigrants is no longer being witnessed.

Questions also need to be posed to the Nairobi City County Government on the processing and issuing of permits to foreign businesses owners who engage in small-scale businesses actively engaged by the locals such as is Gikomba market. The Kenya Investment Promotion Act 2014 stipulates that foreign investors must benefit the country in promoting acquisition of new resources and the use of local resources. This has led to the use of our immigration laws to allow foreigners easy access to investment certificates together with the necessary business permits provided they spend huge chunks of money to set up a business. This exposes the huge loopholes in Kenya’s legal framework capitalized on by foreign investors. Perhaps it is time we ask ourselves the hard questions, like how commercial traders in the heart of Nairobi risked closing of shops due to delay in processing of imported goods and preference in cheaply imported foreign goods yet the government has put in place policies ensuring smooth flow in trade.

As a major pillar in the government’s Big 4 Agenda it is heart-wrenching to note that in public, government officials are cagey in addressing the core issuing hurting the manufacturing industry such as proliferation of foreign traders selling cheap goods but in private, they concede that the influx of cheap manufactured goods from China has dealt a blow to the industry that is meant to drive Kenya’s industrialization ambitions.

With the focus on manufacturing as a niche area in the governments development blue print, stabilization and growth of policies in this sector will only make sense if the manufacturing sector upgrades its capacity and efficiency to increase the volume, quality and competitiveness of manufactured products in the local and export market. This will involve a lot of policy and operational changes the most important being on the locking of our local market from foreign competition to grow our economy.

Until then, the dragon is here to stay. We made our bed, we must as well lie on it.