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National protectionism tests East African integration
East Africa’s real problem is not too much integration, but too little of it — and protectionism risks making the region’s smallest traders pay the price, writes Simon Mulongo.
Simon Mulongo. (File)
By: Admin ., Journalist @New Vision
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OPINION
By Simon Mulongo
East Africa is confronting an uncomfortable contradiction. Governments speak confidently of integration, free movement and a common market, yet the ordinary trader increasingly encounters permits, administrative restrictions and renewed economic nationalism. Kenya’s current controversy over foreign participation in small-scale trade therefore matters far beyond Nairobi. This article argues that protecting vulnerable domestic traders is a legitimate responsibility of government, but nationality-based restrictions on East African entrepreneurs risk treating the symptoms of economic distress while weakening the very regional market capable of generating larger opportunities.
On September 2, 2026, President William Ruto directed action against foreigners engaged in hawking and small-scale retail, arguing that such activities should principally benefit Kenyans. The announcement generated anxiety among foreign communities. By September 8, however, State House had clarified the approach, providing a 90-day period for foreign business operators to regularise immigration status, work permits, business registration and licensing before stricter enforcement. Kenya also reaffirmed protection for foreigners operating lawfully.
That clarification is important. The issue should therefore not be reduced to the simplistic accusation that Kenya is expelling East Africans. Governments have a sovereign responsibility to regulate immigration, enforce licensing, collect taxes and prevent businesses from operating illegally. A common market cannot mean a lawless market. Indeed, East African Community (EAC) guidance itself recognises that self-employed citizens exercising regional rights remain subject to applicable national laws and administrative requirements. Yet something deeper is happening.
The surface issue is foreign hawkers. The undercurrent is the political economy of scarcity. When employment creation fails to keep pace with labour force growth, taxation bites into small margins and household purchasing power becomes strained, the informal marketplace becomes the final economic refuge. Competition over a kiosk, market stall or pavement then acquires political significance. The foreign trader becomes highly visible, while structural problems of productivity, credit, taxation, technology and employment remain comparatively invisible.
This is why economic nationalism is politically seductive. It transforms a complicated distribution problem into an easily understood nationality problem. Remove the foreign competitor and apparently the citizen gains. But economics is rarely that linear. Traders are simultaneously consumers, suppliers, tenants, transport customers, taxpayers and links within regional distribution chains. Removing one participant may redistribute turnover to another trader, but it may also reduce competition, disrupt supply networks and raise transaction costs.
The numbers make the contradiction particularly striking. Intra-EAC trade increased from $14.2b to $18b between June 2024 and June 2025, a 27% increase. By 2024, regional trade had risen substantially from $6.42b in 2016 to $15.25b. Yet intra-regional commerce still represented only about 12.2% of total trade in 2024. The EAC itself acknowledges that intra-regional trade has remained around 15% for years, considerably below the estimated potential of 30 to 50% or more. In other words, East Africa's problem is not excessive integration. It is insufficient integration.
The legal question is equally consequential. The EAC Common Market Protocol guarantees nationals of Partner States the right of establishment. Article 13 specifically covers pursuing economic activity as a self-employed person and establishing and managing economic undertakings in another Partner State. It further requires the removal of nationality-based restrictions and prohibits new restrictions except as permitted by the Protocol.
This does not automatically render every Kenyan regulatory measure unlawful. The precise legal effect depends upon the legislation eventually adopted, the categories of business covered, applicable schedules and exceptions, and how enforcement distinguishes EAC citizens from other foreign nationals. Tanzania has therefore adopted the prudent position of examining whether Kenya's contemplated restrictions are compatible with the Common Market Protocol rather than prematurely declaring a breach.
The surface issue is foreign hawkers. The undercurrent is the political economy of scarcity. When employment creation fails to keep pace with labour force growth, taxation bites into small margins and household purchasing power becomes strained, the informal marketplace becomes the final economic refuge. Competition over a kiosk, market stall or pavement then acquires political significance. The foreign trader becomes highly visible, while structural problems of productivity, credit, taxation, technology and employment remain comparatively invisible.
This is why economic nationalism is politically seductive. It transforms a complicated distribution problem into an easily understood nationality problem. Remove the foreign competitor and apparently the citizen gains. But economics is rarely that linear. Traders are simultaneously consumers, suppliers, tenants, transport customers, taxpayers and links within regional distribution chains. Removing one participant may redistribute turnover to another trader, but it may also reduce competition, disrupt supply networks and raise transaction costs.
The numbers make the contradiction particularly striking. Intra-EAC trade increased from $14.2b to $18b between June 2024 and June 2025, a 27% increase. By 2024, regional trade had risen substantially from $6.42b in 2016 to $15.25b. Yet intra-regional commerce still represented only about 12.2% of total trade in 2024. The EAC itself acknowledges that intra-regional trade has remained around 15% for years, considerably below the estimated potential of 30 to 50% or more. In other words, East Africa's problem is not excessive integration. It is insufficient integration.
The legal question is equally consequential. The EAC Common Market Protocol guarantees nationals of Partner States the right of establishment. Article 13 specifically covers pursuing economic activity as a self-employed person and establishing and managing economic undertakings in another Partner State. It further requires the removal of nationality-based restrictions and prohibits new restrictions except as permitted by the Protocol.
This does not automatically render every Kenyan regulatory measure unlawful. The precise legal effect depends upon the legislation eventually adopted, the categories of business covered, applicable schedules and exceptions, and how enforcement distinguishes EAC citizens from other foreign nationals. Tanzania has therefore adopted the prudent position of examining whether Kenya's contemplated restrictions are compatible with the Common Market Protocol rather than prematurely declaring a breach.
That distinction must be preserved. A Burundian, Ugandan or Tanzanian exercising Treaty rights cannot analytically be placed in the same category as every other foreign national without examining EAC law. Neither should possession of EAC citizenship excuse noncompliance with legitimate registration, taxation and licensing requirements.
The greater danger is reciprocity. If Kenya reserves one layer of commerce for Kenyans, political pressure may encourage Uganda, Tanzania, Burundi or others to construct equivalent protected spaces. What begins as protection of petty traders could gradually fragment transport, professional services, labour markets and investment. Regional integration would then survive ceremonially at summits while being dismantled administratively in marketplaces.
Kenya deserves credit for tempering the initial shock with a 90-day regularisation process and engaging affected communities. Reports on 9 September indicated that expulsions had been halted while registration and documentation proceeded. That creates an opportunity for regional diplomacy rather than retaliatory nationalism.
The revolutionary response is therefore not unrestricted migration, nor protectionism. It is productive integration. Register traders. Enforce taxes fairly. Digitise cross-border businesses. Expand affordable SME credit. Punish illegal operations regardless of nationality. Establish simplified regional licensing for micro enterprises and build portable social protection for mobile workers. Above all, East Africa must resist making poverty fight poverty.
A Kenyan hawker and a Burundian shopkeeper are not the principal adversaries in East Africa's development struggle. Their common adversaries are low productivity, unemployment, expensive capital, fragmented markets and weak industrialisation. The strategic objective should therefore be to enlarge the economic table rather than continually deciding which East African is entitled to the smallest seat.
The writer is the Minister of State for Labour, Employment and Industrial Relations
The greater danger is reciprocity. If Kenya reserves one layer of commerce for Kenyans, political pressure may encourage Uganda, Tanzania, Burundi or others to construct equivalent protected spaces. What begins as protection of petty traders could gradually fragment transport, professional services, labour markets and investment. Regional integration would then survive ceremonially at summits while being dismantled administratively in marketplaces.
Kenya deserves credit for tempering the initial shock with a 90-day regularisation process and engaging affected communities. Reports on 9 September indicated that expulsions had been halted while registration and documentation proceeded. That creates an opportunity for regional diplomacy rather than retaliatory nationalism.
The revolutionary response is therefore not unrestricted migration, nor protectionism. It is productive integration. Register traders. Enforce taxes fairly. Digitise cross-border businesses. Expand affordable SME credit. Punish illegal operations regardless of nationality. Establish simplified regional licensing for micro enterprises and build portable social protection for mobile workers. Above all, East Africa must resist making poverty fight poverty.
A Kenyan hawker and a Burundian shopkeeper are not the principal adversaries in East Africa's development struggle. Their common adversaries are low productivity, unemployment, expensive capital, fragmented markets and weak industrialisation. The strategic objective should therefore be to enlarge the economic table rather than continually deciding which East African is entitled to the smallest seat.
The writer is the Minister of State for Labour, Employment and Industrial Relations